Which of the Following Condition(s)favors Using Departmental Overhead Rates in Place

question 166

Multiple Choice

Which of the following condition(s) favors using departmental overhead rates in place of a plantwide overhead rate?

• A)Different departments incur different amounts and types of manufacturing overhead.
• B)Different jobs or products use the departments to a different extent.
• C)Both of the above are true.
• D)Neither of the above are true.

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Definitions:

Deposit Method

An accounting method used when revenue cannot be recognized because the fundamental earnings process is not considered complete.

Cost Recovery Method

An accounting method where revenues are not recognized until all costs have been recovered.

Real Estate Sales

Transactions involving the transfer of ownership rights in property or land from one party to another, typically facilitated by agents or brokers.

Contra-Asset Account

A contra-asset account is an account used in a ledger to reduce the value of a related account. It has a credit balance and is used to adjust the value of an asset account to its net value.