Reference no: EM132953937

Problem 1: Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead costs to jobs?

Problem 2: Provide two reasons why overhead might be under applied in a given year?

Problem 3: Why is it more accurate to clear out the balance of any under- or overapplied manufacturing overhead costs to WIP, finished goods and cost of goods sold than to cost of goods sold only?

Problem 4: Under what circumstances is it more appropriate to use direct labour hours rather than machine hours to allocate manufacturing overhead costs?