An equal amount of manufacturing overhead should be allocated to each job.

Question

Quizplus · Accepted Answer

Allocating an equal amount of manufacturing overhead to each job is not an accurate method of allocation. Manufacturing overhead costs should be allocated based on the activity or cost drivers that actually cause the overhead costs to be incurred, such as machine hours, direct labor hours, or materials used. This ensures that costs are allocated in a manner that reflects the actual usage of resources by each job, and leads to more accurate and reliable product costs.

An Equal Amount of Manufacturing Overhead Should Be Allocated to Each