Which of the following characteristics is a consequence of the implementation of a plant-wide allocation rate?
A)The uniqueness of individual departments is not reflected in the cost numbers.
B)Allocations are first conducted among departments, and then aggregated for the plant as a whole.
C)Downstream costs are not measured at all.
D)Managers have absolutely no incentive to control costs.

Question

Quizplus · Accepted Answer

A plant-wide allocation rate allocates overhead costs to all departments based on a single rate, rather than reflecting the unique cost drivers of each department. Therefore, the uniqueness of individual departments is not reflected in the cost numbers.

Which of the Following Characteristics Is a Consequence of the Implementation