Managerial

Estimated Annual OH/ Estimated Annual Activity level

Predetermined OH rate x Actual Activity usage

Applied OH- Actual OH

Unadjusted COGS +- OH variance

Estimated Departmental OH/ Estimated Department Activity level

Total DM + Total DL + Applied OH

Total product cost / # of units

used by firms producing unique products or services

used by firms producing very similar products or services

a single OH rate calculated by using all estimated OH for a factory divided by the estimated activity level across the entire factory