The use of departmental overhead rates will generally result in:

Question

Quizplus · Accepted Answer

The use of departmental overhead rates typically involves the allocation of overhead costs to each department based on a separate cost allocation base specific to that department. This method allows for a more accurate allocation of overhead costs based on the different activities and cost drivers used in each department. Therefore, option C - the use of a separate cost allocation base for each department in the shop - is the best choice. Options A, B, and D are incorrect because they do not accurately describe the use of departmental overhead rates.

The Use of Departmental Overhead Rates Will Generally Result In