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tankabanditka [31]
1 year ago
9

One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors. True or false?.

Business
1 answer:
Vika [28.1K]1 year ago
3 0

It is a true statement that one of use of a predetermined overhead rate is to eliminate the effect of seasonal factors.

<h3>What is a predetermined overhead rate?</h3>

It is also known as a plant-wide overhead rate. It refers to the calculation that is used to determine how much of the total manufacturing overhead cost will be attributed to each unit of product manufactured. This overhead rate is determined by dividing the fixed overhead cost by the estimated number of direct labor hours.

In conclusion, it is a true statement that one of use of a predetermined overhead rate is to eliminate the effect of seasonal factors as it accounts and plans against such seasonal risk.

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