This article was co-authored by Madison Boehm and by wikiHow staff writer, Amber Crain. Madison Boehm is a Business Advisor and the Co-Founder of Jaxson Maximus, a men’s salon and custom clothiers based in southern Florida. She specializes in business development, operations, and finance. Additionally, she has experience in the salon, clothing, and retail sectors. Madison holds a BBA in Entrepreneurship and Marketing from The University of Houston.
This article has been fact-checked, ensuring the accuracy of any cited facts and confirming the authority of its sources.
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Calculating a predetermined overhead rate (POR) is a great way for businesses to balance expenses with production costs and sales. If you want to learn how to use this tool for yourself, you’ve come to the right place! In this article, we’ll explain what a predetermined overhead rate is, what factors are used to determine it, and how to apply the formula. We’ll also provide several examples so you can see different ways POR can influence accounting and budgeting. If you’re ready to protect your profits and get a handle on business expenses, read on!
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