Asked by Iqbal Qayum on May 17, 2024
Verified
Which of the following approaches combines all the manufacturing overhead costs into a single cost pool?
A) Plantwide rate
B) Activity-based costing
C) Departmental overhead rates
D) Budgeted activity rate
Plantwide Rate
A single overhead absorption rate used throughout an entire manufacturing plant, applying the same rate to all products regardless of the department.
Activity-based Costing
A costing method that assigns overhead and indirect costs to specific activities related to production.
Departmental Overhead Rates
The method for allocating overhead costs to specific departments based on relevant allocation bases, such as labor hours or machine hours.
- Understand the principles and methodologies for allocating manufacturing overhead costs.
Verified Answer
MR
Mustafa RushdiMay 19, 2024
Final Answer :
A
Explanation :
The plantwide rate approach combines all manufacturing overhead costs into a single cost pool and allocates this cost pool to products based on a single predetermined overhead rate applied to a single cost driver such as direct labor hours or machine hours.
Learning Objectives
- Understand the principles and methodologies for allocating manufacturing overhead costs.