Enter the total manufacturing overhead cost and the estimated units of the allocation base for the period to determine the overhead rate.

Predetermined Overhead Rate Formula

The following equation is used to calculate the predetermined overhead rate.

  • Where POR is the predetermined overhead rate
  • MOC is the manufacturing overhead cost
  • UA is the unit of allocation.

To calculate a predetermined overhead rate, divide the manufacturing overhead cost by the units of allocation.

Predetermined Overhead Rate Definition

A predetermined overhead rate is defined as the ratio of manufacturing overhead costs to the total units of allocation.

Predetermined Overhead Rate Example

How to calculate predetermined overhead rate?

  1. First, determine the manufacturing overhead cost.

    Calculate the total manufacturing overhead cost.

  2. Next, determine the units of allocation.

    Calculate the total units of allocation.

  3. Finally, calculate the POR.

    Calculate the predetermined overhead rate using the equation above.

predetermined overhead rate calculator
predetermined overhead rate formula