In practice,it may be too costly to have several cost-allocation bases for applying overhead costs to products.

Question

Quizplus · Accepted Answer

It is often not cost-effective to have multiple cost allocation bases for applying overhead costs to products. The cost of collecting and analyzing data for multiple allocation bases may outweigh the benefits of more accurate cost allocation. Therefore, companies may choose to use simpler methods for overhead cost allocation, such as using a single allocation base or a predetermined overhead rate.

In Practice,it May Be Too Costly to Have Several Cost-Allocation