-Refer to the figure.Under traditional costing methods,which product would have more overhead costs allocated?
A)Product A,because it has the highest total cycle time
B)Product B,because it has the highest individual cycle time in Moulding
C)Product A,because the first two cycles are bottlenecks
D)Product B,because the last two cycles are bottlenecks

Question

-Refer to the figure.Under traditional costing methods,which product would have more overhead costs allocated?
A)Product A,because it has the highest total cycle time 
B)Product B,because it has the highest individual cycle time in Moulding 
C)Product A,because the first two cycles are bottlenecks 
D)Product B,because the last two cycles are bottlenecks

Quizplus · Accepted Answer

Under traditional costing methods, overhead costs are typically allocated based on a single cost driver, such as labor hours or machine hours, rather than specific activities or cycle times. Product A would have more overhead costs allocated because it has the highest total cycle time, suggesting it consumes more resources overall, which is how traditional costing methods generally allocate overhead costs.

-Refer to the Figure