Which of the following are drawbacks to applying actual overhead to production?

Question

Quizplus · Accepted Answer

All the options listed are drawbacks to applying actual overhead to production. A delay in assigning costs to jobs or products (A) could lead to inaccurate costing information. Fluctuations in quantities produced during a period could cause varying per-unit charges for fixed overhead (B), which makes it tough to compare the costs of producing different quantities of the same product. Seasonality of overhead costs may cause distortions in job or product costs (C), which is particularly challenging for businesses that have peaks and troughs in operational activity. Therefore, all the options are correct in highlighting the potential drawbacks of applying actual overhead to production.

Which of the Following Are Drawbacks to Applying Actual Overhead