The Usefulness of Overhead Allocations Based on a Plantwide Overhead

question 205

True/False

The usefulness of overhead allocations based on a plantwide overhead rate depends on two crucial assumptions: (1)the overhead cost is correlated with the allocation base; and (2)all products use overhead cost in dissimilar proportions.

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Definitions:

Cumulative Voting

A method of voting in corporate elections which allows shareholders to concentrate their votes on one candidate rather than spreading them out among several candidates.

Annual General Meeting

A mandatory yearly gathering of a company's interested shareholders where directors report on the year's results.

Directors

Directors are individuals elected by shareholders or appointed by other directors who oversee the management and decision-making processes of a corporation.

Right Of Full Participation

The entitlement to engage actively and fully in a process or activity, without restrictions.