Which of the Following Statements Regarding Plantwide Overhead Rates Is

question 12

Multiple Choice

Which of the following statements regarding plantwide overhead rates is true?

• A) Plantwide overhead rates based on the direct labor hours or machine time works well for all company.
• B) Plantwide overhead rates must use machine hours as their cost driver.
• C) As the number of diverse products a company makes increases, the likelihood that a company will replace a plantwide overhead rate with a departmental overhead rate increases.
• D) Plantwide overhead rates are usually more costly to prepare than a departmental overhead rate.

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Definitions:

Disposable Personal Income

The sum of money remaining for savings and expenditures in households once income taxes are deducted.

National Income

The total amount of money earned by a nation's people and businesses, including wages, rent, interest, and profits.

Market Prices

The current prices at which goods and services are being sold in the market, determined by the forces of supply and demand.

Goods and Services

The output produced by a country's economy that can be physically consumed or used to provide a service.