In an Effort to Simplify the Multiple Production Department Factory

question 57

True/False

In an effort to simplify the multiple production department factory overhead rate method, the same rate can be used for all departments.

---

Definitions:

Overapplied Overhead

A situation in cost accounting where the allocated manufacturing overhead costs are more than the actual overhead costs incurred.

Underapplied Overhead

Occurs when the allocated or applied overhead costs in the production process are less than the actual overhead costs incurred.

Manufacturing Overhead Account

An accounting category that records the indirect costs associated with producing goods, such as utilities for the factory or salaries for the maintenance staff.

Overapplied Manufacturing Overhead

A situation where the amount of manufacturing overhead allocated to products is more than the actual overhead incurred.