Which of the following statements is true with regard to the departmental overhead rate method? Multiple Choice It requires one overhead cost pool and one rate. Each department has the same rate for the same activity pool. It is the same as activity-based costing. It is especially accurate in assigning overhead costs that are not driven by production volume. It uses a different overhead rate for each department.

Which of the following statements is true with regard to the departmental overhead rate method? Multiple Choice It requires one overhead cost pool and one rate. Each department has the same rate for the same activity pool. It is the same as activity-based costing. It is especially accurate in assigning overhead costs that are not driven by production volume. It uses a different overhead rate for each department.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 8DQ: Under what circumstances might the activity-based costing method provide more accurate product costs...

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Similar questions

What are the two most frequently used methods of distributing service department costs to production departments?
Which is not a task typically associated with ABC systems? A. calculating the overhead application rate for each cost pool B. applying a single cost rate C. identifying a cost driver D. more correctly allocating overhead costs
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A company has traditionally allocated its overhead based on machine hours but collected this information to change to activity based costing: A. How much overhead would be assigned to each unit under the traditional allocation method? B. How much overhead would be assigned to each unit under activity-based costing?
When using normal costing, how are jobs charged with overhead?
Under absorption costing, a unit of product includes which costs? A. direct material, direct labor, and manufacturing overhead B. direct material, direct labor, and variable manufacturing overhead C. direct material, direct labor, and fixed manufacturing overhead D. direct material, direct labor, and all variable manufacturing overhead
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How does activity-based costing differ from the multiple production department factory overhead rate method?
Which of the following statements is true regarding activity-based costing systems? ABC costing systems are less complex and, therefore, less costly than traditional systems. ABC costing systems can be used in manufacturing firms only. ABC systems accumulate overhead costs by departments. ABC costing systems have separate indirect cost allocation rates for each activity.
Which of the following statements about overhead allocation based on volume alone is correct? Select one: a. It will systematically overcost high-volume products and undercost low-volume products. b. It must be used for external financial reporting. c. It will systematically overcost low-volume products and undercost high-volume products. d. It is a key aspect of the activity-based costing model.
Which of the following statements is true? O The first step in activity-based costing is to assign overhead costs to products using cost drivers ABC usually results in less appropriate management decisions Activity-based costing allocates overhead to multiple activity cost pools and assigns the cost pools to products using cost drivers O Traditional costing systems use multiple predetermined overhead rates