Question

The overhead allocation rate is calculated by dividing: a actual overhead costs by the actual quantity of the allocation base. b the actual overhead costs by the estimated quantity of the allocation base. c the estimated overhead costs by the actual quantity of the allocation base. d the estimated overhead costs by the estimated quantity of the allocation base.

Answer 1

Step-by-step explanation:

The overhead allocation rate is typically calculated by dividing:

d) the estimated overhead costs by the estimated quantity of the allocation base.

This method allows for a consistent allocation rate to be applied throughout the accounting period, helping to simplify budgeting and costing processes.