If only one or two overhead cost pools are used,
A)it will be easy to determine which products or services are creating the most costs.
B)overhead created by a specific product will be assigned to all products.
C)the reduction in cost accumulation and allocation time will raise company profits.
D)allocations should be made using only unit-based cost drivers.

Question

Quizplus · Accepted Answer

When only one or two overhead cost pools are used, the overhead costs are not accurately traced to the specific products that actually caused those costs. Instead, the overhead is spread across all products, which can lead to inaccurate costing and pricing decisions.

If Only One or Two Overhead Cost Pools Are Used