Asked by Claire Fening on Jul 02, 2024
Which of the following is a drawback in using a single plantwide rate to apply overhead to product costs?
A) Support department costs are not combined with all other overhead costs.
B) A single driver is used for all overhead costs and it is unlikely that the driver selected is appropriate for every type of overhead.
C) Some overhead costs are missing from the application process.
D) Too much emphasis is placed on the fact that manufacturing processes differ from one product to another.
Single Plantwide Rate
A method in cost accounting where overhead costs are allocated to products based on a single, company-wide rate, ignoring departmental differences.
Overhead Costs
Expenses that are not directly attributable to a specific product line or service but are necessary for the business to operate.
- Examine the various methods for allocating costs in support departments, focusing on the precision of each approach.
- Identify the consequences of incorrect allocation of overhead costs to product costing.
Learning Objectives
- Examine the various methods for allocating costs in support departments, focusing on the precision of each approach.
- Identify the consequences of incorrect allocation of overhead costs to product costing.
Related questions
Which of the Following Statements Explains the Major Difference Between ...
Airco Company Is Tempted to Consider Support Department Costs to ...
Using Multiple Department Factory Overhead Rates Instead of a Single ...
Sawtooth Leather Company Manufactures Leather Handbags and Moccasins ...
If the Direct Labor Time Estimates Are Met,Malone Will Allocate ...