Predetermined Overhead Rate

Written by Jerry Ratzlaff on . Posted in Manufacturing Engineering

Predetermined overhead rate, abbreviated as POHR, is the allocation rate that is assigned to products or job orders at the beginning of a project.

 

Predetermined Overhead Rate Formula

\(\large{ POHR =  \frac{ MOHR }{ ABP }  }\)   

Where:

\(\large{ POHR }\) = predetermined overhead rate

\(\large{ MOHR }\) = estimated manufacturing overhead rate

\(\large{ ABP }\) = estimated units of the allocation base for the period

 

Tags: Equations for Manufacturing