Asked by Makayla Kortz on Jun 07, 2024
Verified
Which of the following is not true?
A) The departmental overhead method assigns overhead on the basis of volume-related measures.
B) The departmental overhead rate method is more refined than the plantwide overhead rate method.
C) Overhead costing accuracy is improved by the use of multiple departmental rates rather than a single overhead rate.
D) The departmental overhead rate method does not assign overhead on the basis of volume-related measures.
E) The departmental overhead rate method is more costly to implement than the plantwide overhead rate method.
Departmental Overhead Method
A technique in accounting used to allocate overhead costs to specific departments based on relevant allocation bases such as direct labor hours or machine hours.
Volume-related Measures
Quantitative assessments related to the amount or size of something, especially used in the context of production and sales.
Overhead Costing Accuracy
The degree to which allocated overhead costs accurately represent the actual expenses incurred by the production process or specific products.
- Understand the allocation of overhead costs through various overhead rate methodologies, including plantwide, departmental, and activity-based approaches.
- Comprehend the benefits and drawbacks of using volume-based allocation methods as opposed to activity-based costing.
Verified Answer
Learning Objectives
- Understand the allocation of overhead costs through various overhead rate methodologies, including plantwide, departmental, and activity-based approaches.
- Comprehend the benefits and drawbacks of using volume-based allocation methods as opposed to activity-based costing.
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