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.

Question

Quizplus · Accepted Answer

A single plantwide overhead rate often uses one cost driver to allocate all overhead costs, which may not accurately reflect the consumption of overhead resources by different products, leading to potential cost distortion.

Which of the Following Is a Drawback in Using a Single