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why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?

User Skaeff
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Answer and explanation:

Corporations tend to use predetermined overhead rates instead of actual manufacturing overhead costs because they are difficult to trace. Overhead costs are typically calculated at the end of an accounting period but managers must know this information before the end of the year so they can have an idea of what is the performance of the company. Besides, predetermined overhead rates make it easy to record production costs compared to actual overhead costing.

User Roman Usherenko
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