Which of the following is a drawback in using a single plantwide rate to apply overhead...
Which of the following is a drawback in using a single plantwide rate to apply overhead to product costs?
a. Too much emphasis is placed on the fact that manufacturing processes differ from one product to another.
b. Some overhead costs are missing from the application process.
c. A single driver is used for all overhead costs and it is unlikely that the driver selected is appropriate for every type of overhead.
d. Support department costs are not combined with all other overhead costs.
Homework Answers
Different expenses are apportioned on different basis. For example indirect labor is apportioned on the basis of direct labor. Thus the basis of absorption for different overhead should be different. For example the overhead expense of production department should be based on machinery hours whereas for packaging department should be based on number of units. Thus different overhead cost should have different cost driver.
Answer: C
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Which of the following is a drawback in using a single plantwide rate to apply overhead...
A single plantwide overhead application rate a. is likely to result in the most accurate product...
A single plantwide overhead application rate a. is likely to result in the most accurate product costs b. requires a multiple-step application process from support departments to production departments c. is likely to result in inaccurate product costs d. focuses on identifying multiple drivers to apply to every single production department
When a single plantwide overhead rate is used to apply overhead to products, support department costs...
When a single plantwide overhead rate is used to apply overhead to products, support department costs are a.impossible to trace. b.allocated with multiple drivers using a single rate. c.nonexistent, because a single plantwide rate cannot be used when a company has support departments. d.combined with all other overhead costs. Which of the following statements regarding direct costs is true? a.All direct costs of a support department are accumulated in the department, and general factory overhead is never assigned to the...
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Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor...
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Eclipse: Assembly Department Testing...
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor...
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Eclipse: Assembly Department $280,000...
Exercise 17-8 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
Exercise 17-8 Using the plantwide overhead rate to assess prices LO
P1 Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in its components
departmentThe mechanical systems are combined with the housing
assembly in its finishing departmentThe activitiescostsand crivers
associated with these two manufacturing processes and the
production support process follow (Loss amounts should be indicated
with a minus sign. Round your intermediate calculations and round
Cost per unit and OH rateanswers to 2...
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two...
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Instructions The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production...
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor...
Single Plantwide and Multiple Production Department Factory
Overhead Rate Methods and Product Cost Distortion
Eclipse Motor Company manufactures two types of specialty
electric motors, a commercial motor and a residential motor,
through two production departments, Assembly and Testing.
Presently, the company uses a single plantwide factory overhead
rate for allocating factory overhead to the two products. However,
management is considering using the multiple production department
factory overhead rate method. The following factory overhead was
budgeted for Eclipse:
Assembly Department
$280,000...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Instructions The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production...
Single Plantwide and Multiple Production Department Factory Overhead Rate Methods and Product Cost Distortion Eclipse Motor Company manufactures two types of specialty electric motors, a commercial motor and a residential motor, through two production departments, Assembly and Testing. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering using the multiple production department factory overhead rate method. The following factory overhead was budgeted for Eclipse: Assembly Department Testing...
Exercise 17-8 Using the plantwide overhead rate to assess prices LO
P1 Way Cool produces two different models of air conditioners. The
company produces the mechanical systems in its components
departmentThe mechanical systems are combined with the housing
assembly in its finishing departmentThe activitiescostsand crivers
associated with these two manufacturing processes and the
production support process follow (Loss amounts should be indicated
with a minus sign. Round your intermediate calculations and round
Cost per unit and OH rateanswers to 2...
Exercise 17-7 Using the plantwide overhead rate to assess prices LO P1 Way Cool produces two different models of air conditioners. The company produces the mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow. (Loss amounts should be indicated with a minus sign. Round your intermediate calculations and round "Cost per unit and...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Instructions The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production...
Single Plantwide and Multiple Production Department Factory
Overhead Rate Methods and Product Cost Distortion
Eclipse Motor Company manufactures two types of specialty
electric motors, a commercial motor and a residential motor,
through two production departments, Assembly and Testing.
Presently, the company uses a single plantwide factory overhead
rate for allocating factory overhead to the two products. However,
management is considering using the multiple production department
factory overhead rate method. The following factory overhead was
budgeted for Eclipse:
Assembly Department
$280,000...
Single plantwide and Multiple production department factory overhead rate methods and product cost distortion Instructions Single Plantwide Method Multiple Production Department Method Final Questions Instructions The management of Firebolt Industries Inc. manufactures gasoline and diesel engines through two production departments, Fabrication and Assembly. Management needs accurate product cost information in order to guide product strategy. Presently, the company uses a single plantwide factory overhead rate for allocating factory overhead to the two products. However, management is considering the multiple production...
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