If the amount of effort and attention to products varies substantially throughout a company's various manufacturing operations,the company might consider the use of:
A)a plant-wide overhead rate.
B)departmental overhead rates.
C)actual overhead rates instead of predetermined overhead rates.
D)direct labor hours to determine the overhead rate.
E)machine hours to determine the overhead ratE.

Question

Quizplus · Accepted Answer

Departmental overhead rates would allow for more accurate allocation of overhead costs based on the specific level of effort and attention required in each department. This would provide a more accurate representation of the costs incurred in each department and improve decision-making regarding pricing and product mix.

If the Amount of Effort and Attention to Products Varies