Which of the Following Is a Disadvantage of the Departmental

question 62

Multiple Choice

Which of the following is a disadvantage of the departmental overhead rate method?

• A)It may fail to accurately assign many overhead costs that are not driven by production volume.
• B)Allows each department to have its own overhead rate.
• C)Allows each department to have its own allocation base.
• D)The departmental overhead rate is usually more accurate in overhead allocations than the plantwide overhead rate.
• E)The departmental overhead rate is consistent with GAAP and can be used for external reporting.

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Definitions:

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