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Accounting
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Apr 17th, 2015

The formula to calculate the Predetermined OH allocation rate is:

Estimated manufacturing overhead cost/Estimated total units in the allocation base

$607,500/270,000=$2.25

The actual overhead rate applied is:

Predetermined OH allocation rate * Actual total units in the allocation base

$2.25 * 30,000 = $67,500

Apr 17th, 2015

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