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The overhead application rate formula divides; A. Overhead in the prior period by direct labor hours B. Maximum capacity by budgeted overhead. C. Overhead in

The overhead application rate formula divides;

A. Overhead in the prior period by direct labor hours

B. Maximum capacity by budgeted overhead.

C. Overhead in the prior period by an activity level estimated for the current period.

D. Budgeted overhead by an appropriate activity level.

the answer is D, but why?

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