Case 1 - Case 1 1. The predetermined overhead rate is used...

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Case 1 1. The predetermined overhead rate is used for estimating the manufacturing overhead cost because companies cannot assign the actual overhead cost to specific job. From the case, Wall Décor uses a traditional job-order costing system. The actual costs of direct materials and direct labor are charged to its specific jobs which are unframed prints, steel-framed with no matting prints, and wood-framed with matting prints. 2. The advantage of using the cost of each print as a manufacturing overhead cost driver is that the base is easily to determine because we can calculate the cost of the prints. The disadvantage of using the cost of each print as a manufacturing overhead cost driver is that manufacturing overhead is an indirect cost. This means that it is either difficult to trace these costs to a particular product. The actual overhead incurred may not relate to the cost of print. 3.
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This note was uploaded on 07/03/2011 for the course ACCT 500 taught by Professor Martin during the Spring '11 term at Fayetteville State University.

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Case 1 - Case 1 1. The predetermined overhead rate is used...

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