Question

The president of Platinum Tracks has heard that some companies in the industry have changed to a system of computing the predetermined overhead rate based on the hours of studio service that could be provided at capacity. He would like to know what effect this method would have on job costs. How much overhead would have been applied using this method to the Verde Baja job if it had been done last year? This year? (Do not round your intermediate calculations.)

Answer 1

Reviewing Overhead cost on jobs to Man hours

Explanation: Since some companies have taken the initiative to Predetermine their Overhead cost in relation to studio service that should be at capacity would help the organization in its overall budgeting and planning, execution of resources so that optimal results would be achieved at the end of the business day. also it would help the organizations to mitigate risks and hazards on the job.