Which of the Following Are Advantages of Using the Plantwide

question 83

Multiple Choice

Which of the following are advantages of using the plantwide overhead rate method?

• A)The use of cost pools is considerably more accurate than other overhead allocations.
• B)The necessary information is readily available.
• C)It is more accurate than traditional overhead allocations.
• D)Each department has its own overhead rate and its own allocation base.
• E)It takes into account that when products differ in batch size and complexity,they usually consume different amounts of overhead resources.

---

Definitions:

Further Processing Costs

Additional costs incurred when processing products beyond their initial production stage to enhance their value.

Selling Price

The amount a seller charges a buyer for a product or service, determined by various factors including cost, demand, and competition.

Variable Overhead Costs

Overhead costs that fluctuate with the level of production activity, such as utilities for the manufacturing plant.

Operating Capacity

The maximum output or productivity level that a company can achieve using its current resources under normal working conditions.