A. Discuss the development of factory overhead rates. Why do we need factory overhead rates, and how are they computed? Discuss the accuracy of the computation of a factory overhead rate.
B. Explain why the increase in the overhead rate should not hav
Units of Production
Direct Materials Cost
Direct Labor Cost
Direct Labor Hours
are some of the bases for allocation of overhead costs.
When there are multiple products, to arrive at proper costing of products and to decide the pricing, we need a rational allocation of overhead costs.
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