Traditional overhead allocations result in which of the following situations?
A)Overhead costs are assigned as period costs to manufacturing operations.
B)High-volume products are assigned too much overhead,and low-volume products are assigned too little overhead.
C)Low-volume products are assigned too much,and high-volume products are assigned too little overhead.
D)The resulting allocations cannot be used for financial reports.

Question

Quizplus · Accepted Answer

Traditional overhead allocations often use a single predetermined overhead rate which may result in assigning too much overhead to high-volume products and too little to low-volume products. This can lead to distorted costs and pricing decisions, and may not accurately reflect the true cost of producing products.

Traditional Overhead Allocations Result in Which of the Following Situations