The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity. a. true b. false

True

Explanation:

Absorption costing is a method of costing where production units and inventories are value at the full cost per unit. Here, fixed overheads are charged to all units produced using an overhead absorption rat

Under the traditional absorption costing system, overhead is assigned to units produced using different bases ranging from labour hours, machine hours, e.t.c

Overhead absorption rate = Estimated overhead/Estimated Activity level

Answer : True

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