The overhead allocation base should be the cost driver of manufacturing overhead costs.

Name: The overhead allocation base should be the cost driver of manufacturing overhead costs.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The allocation base should be the driver of manufacturing overhead costs as it helps allocate the costs to products based on their usage of the allocation base. This provides a more accurate measure of the true cost of producing each product.

The Overhead Allocation Base Should Be the Cost Driver of Manufacturing