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One of your clients Learns that her accountant uses a predetermined overhead to apply overhead to jobs. she wants to know why the accountant is
One of your clients Learns that her accountant uses a predetermined overhead to apply overhead to jobs. she wants to know why the accountant is using this "complicated" costing system. She thinks that actual overhead cost could be assigned to jobs just as direct material and direct labors are traces to jobs and this process would be much simpler/
Required:
Explain the benefits of using predetermined overhead rate and the problem with using actual overhead costs for measuring jobs costs.
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