Which of the following statements is true with regard to the departmental overhead rate method?
A) It is logical to use this method when overhead resources are consumed by various products in substantially the same way throughout multiple departments.
B) It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments.
C) Each department has the same rate for the same activity pool.
D) It requires one overhead cost pool and one rate.
E) It is synonymous with activity-based costing.

Question

Quizplus · Accepted Answer

The departmental overhead rate method is appropriate when different departments consume overhead resources in different ways, necessitating separate rates for each department to accurately allocate costs.

Which of the Following Statements Is True with Regard to the Departmental