Asked by Hailey Gallant on Jun 18, 2024
Verified
The departmental overhead rate method traces costs to each department and then determines an allocation base for each department.
Departmental Overhead Rate Method
A calculation used in cost accounting to allocate overhead expenses to specific departments based on their respective share of direct costs or activity levels.
Allocation Base
A criterion or measure, such as direct labor hours or machine hours, used for allocating costs among multiple cost objects.
- Distinguish and detail the variances between plantwide overhead rate, departmental overhead rate, and the procedures involved in activity-based costing (ABC).
- Acquire knowledge on the determination and utilization of overhead rates within departments for allocating costs.
Verified Answer
MF
Madison FearsJun 22, 2024
Final Answer :
True
Explanation :
The departmental overhead rate method does indeed trace costs to each department and then uses an allocation base for each department to allocate overhead costs.
Learning Objectives
- Distinguish and detail the variances between plantwide overhead rate, departmental overhead rate, and the procedures involved in activity-based costing (ABC).
- Acquire knowledge on the determination and utilization of overhead rates within departments for allocating costs.
Related questions
Overhead Can Be Applied to Products Using One of Three ...
When Using Multiple Production Department Rates, All Overhead Costs Are ...
Slosh,IncProduces Washing Machines That Require Two Processes,assembling and Finishing,to Complete ...
The Departmental Overhead Rate Method Allows Each Department to Have ...
Overhead Costs ...