Why do overheads need to be absorbed upon pre-determined bases?

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2026-08-17 09:25

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Pre-determined overhead rate is required to allocate overhead to units of products to calculate the cost price per unit because it is not practical to wait for the completion of the production and find out the actual overheads and then allocated the cost price to unit to start selling products that's why it is always pre-determined based on standard costs.

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