Question

All of the following are true about using a predetermined overhead rate to apply overhead except, Multiple Choice Estimates are used to calculate the rate. Using this rate provides managers with up-to-date estimates of the costs of their processes during the period. A single allocation basis may fail to provide useful allocations for all production departments. The rate is prepared at the beginning of the period. The rate is used to apply overhead at the end of the accounting period.

Answer 1

The rate is used to apply overhead at the end of the accounting period.

Step-by-step explanation:

The formula to compute the predetermined overhead rate is shown below:

= Estimated manufacturing overhead cost ÷ estimated activity

So for this the estimates should be used, the rate should be prepared after the starting. IF there is a single allocation basis so it would not suceed to allocate for all the production departments also this rate would helpful for the managers with respect to keep up to date estimates

Therefore the last option is correct