In process costing system, the predetermined overhead rate is computed.
A)Only once and used for all the processing department
B)Separately for each processing department
C)Only for the first processing department where units are started
D)Only for the last department where units are completed and transferred to finished goods area.

Question

Quizplus · Accepted Answer

The predetermined overhead rate is often computed separately for each processing department because each department may have different overhead costs and bases for allocation. This allows for more accurate assignment of overhead costs to products as they move through different stages of production.

In Process Costing System, the Predetermined Overhead Rate Is Computed