Explore BrainMass

Explore BrainMass

    Predetermined Overhead Rate

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    If a company in computing its predetermined overhead rate included its factory insurance cost twice. Then does this result in the ending balance:

    of Finished Goods to be understated or
    the credits to the Manufacturing Overhead account to be understated or
    the Cost of Goods Manufactured to be overstated or
    the Net Operating Income to be overstated

    © BrainMass Inc. brainmass.com June 3, 2020, 10:02 pm ad1c9bdddf

    Solution Preview

    If factory insurance is added twice, the predetermined rate would be higher
    Finished goods would be overstated since more ...

    Solution Summary

    The solution explains the impact of predetermined overhead rate