Which of the following statements is not correct concerning multiple overhead rate systems?
A) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate.
B) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate.
C) A company may choose to create a separate overhead rate for each of its production departments.
D) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.

Question

Quizplus · Accepted Answer

In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on direct labor-hours rather than on machine-hours, as the main driver of overhead costs in these departments is likely to be labor-related rather than machine-related. Therefore, statement D is not correct. Statements A, B, and C are all correct.

Which of the Following Statements Is Not Correct Concerning Multiple