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POHR (Predetermined Overhead Rate) is based on two estimates: Total expected MO. Total expected cost driver. 1.How likely is it that POHR is applied correctly?

POHR (Predetermined Overhead Rate) is based on two estimates:

  • Total expected MO.
  • Total expected cost driver.

1.How likely is it that POHR is applied correctly?

2.What happens when POHR is underapplied (too little added as MO to the job sheets) or overapplied (too much applied to the job sheets)?

3.Which is worse (under or over)?

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