The predetermined overhead rate is an estimated overhead rate used to apply overhead costs to products or services during a specific period. It's calculated before the actual costs are known.

When calculating the full cost of a product or service, a company first allocates all direct material and labor costs and direct expenses on a per-unit basis. Overhead costs are those that the ...

The first step in calculating the predetermined overhead rate is to estimate the total overhead costs for the upcoming ...

A predetermined factory overhead rate acts as a benchmark for your indirect production costs. It gives you a way to measure if your factory overhead costs are running high or low for that particular ...