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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

Oct 19th, 2017

Units of Production

Direct Materials Cost

Direct Labor Cost

Direct Labor Hours

Machine 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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