Why must a company use predetermined overhead rates when using job order costing?

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Fundamental Accounting Principles

ISBN: 978-0077862275

22nd edition

Authors: John Wild, Ken Shaw, Barbara Chiappetta

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Question Posted: Apr 23, 2015 03:12 AM

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Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?
Why must a company prepare a predetermined overhead rate when using job order cost accounting?
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Why must a company use predetermined overhead rates when using job order costing?

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A predetermined factory overhead rate must be calculated for at least two rea...View the full answer

Fundamental Accounting Principles

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