Asked by Brisa Sanchez on Jul 03, 2024
Verified
A major disadvantage of using a plantwide overhead rate is the extreme difficulty in gathering the needed information.
Plantwide Overhead Rate
A single overhead absorption rate used throughout a manufacturing plant or facility to allocate indirect costs to products.
Gathering Information
The process of collecting data and insights relevant to a specific topic or question, often an initial step in decision-making or research.
- Understand the pros and cons of utilizing a plantwide overhead rate for the distribution of overhead expenses.
Verified Answer
ZK
Zybrea KnightJul 05, 2024
Final Answer :
False
Explanation :
Plantwide overhead rate involves the use of a single predetermined overhead rate for all of a company's products and operations, which can be easy to compute but can result in inaccurate allocation of overhead costs. However, gathering the needed information for this method is not considered a major disadvantage.
Learning Objectives
- Understand the pros and cons of utilizing a plantwide overhead rate for the distribution of overhead expenses.
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