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    Predetermined Overhead Rate

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    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

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    https://brainmass.com/business/accounting/predetermined-overhead-rate-problem-212250

    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

    $2.19

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