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Predetermined Overhead Rate plays an important role in product costing, particularly in the Job Order Costing...

Predetermined Overhead Rate plays an important role in product costing, particularly in the Job Order Costing method. Explain an image or an object that best describes what PDOR is all about and its important role.
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Answer #1

In the above example it is clear about that the direct labour hours rate.

It is important because the company can take decisions based on the above estimations. They can add their margin along with the cost to make Selling price per units.

In job order costing cost of each product is determined. Predetermined overhead rates will help to do the job easier in job order costing.

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