Which of the following is true of Zitriks' overhead costing?
A) Multiple cost pools are appropriate for Zitriks because of high direct costs.
B) Single cost pool is appropriate for Zitriks because of high direct costs.
C) Multiple cost pools are appropriate for Zitriks because of diverse support costs.
D) Single cost pool is appropriate for Zitriks because of diverse support costs.

Question

Quizplus · Accepted Answer

Zitriks' overhead costing should involve multiple cost pools because of the diverse support costs. This allows for more accurate allocation of overhead costs to the appropriate products or services. Single cost pools would not be appropriate as they would not account for the differences in support costs between various activities or departments. While high direct costs could be a consideration, it is not the main factor in determining the appropriate number of cost pools for Zitriks.

Which of the Following Is True of Zitriks' Overhead Costing