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https://www.accountingformanagement.org/predetermined-overhead-rate/
Predetermined overhead rate = Estimated manufacturing overhead cost/Estimated total units in the allocation base. Predetermined overhead rate = $8,000 / 1,000 hours. = $8.00 per direct labor hour. Notice that the formula of predetermined overhead rate is entirely based on estimates.
https://www.chegg.com/homework-help/questions-and-answers/compute-predetermined-overhead-rate-calculate-cost-jobs-based-direct-labor-hours-learning--q23760598
Boston uses job costing to calculate the cost of its jobs. Overhead is allocated to each job based on the number of direct labor hours spent on that job. At the beginning of the current year, Boston estimated that its overhead for the coming year would be $67.200. It also anticipated using 4, 200 direct labor hours for the year.
https://opentextbc.ca/principlesofaccountingv2openstax/chapter/calculate-predetermined-overhead-and-total-cost-under-the-traditional-allocation-method/
The predetermined overhead rate is set at the beginning of the year and is calculated as the estimated (budgeted) overhead costs for the year divided by the estimated (budgeted) level of activity for the year. This activity base is often direct labor hours, direct labor costs, or machine hours.Author: Patty Graybeal, Mitchell Franklin, Dixon Cooper
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