Asked by Shay D. Davis on Jun 10, 2024
Verified
When using multiple production department rates, all overhead costs are allocated to production departments and none of them are directly traced to support departments.
Production Department Rates
Rates used in manufacturing to allocate costs to products or services, often based on the time spent in various production departments or the resources used.
Support Departments
Units within an organization that provide essential services or support to the core departments but do not directly generate revenue.
- Identify the assortment of methods used for overhead distribution, including the single plantwide rate, rates for several production departments, and the activity-based costing (ABC) approach.
Verified Answer
KL
Kelley Law OfficeJun 10, 2024
Final Answer :
False
Explanation :
When using multiple production department rates, overhead costs are allocated to both production and support departments. Costs from support departments are then allocated to production departments before being applied to products.
Learning Objectives
- Identify the assortment of methods used for overhead distribution, including the single plantwide rate, rates for several production departments, and the activity-based costing (ABC) approach.