The plant wide cost allocation method should be used by companies that manufacture products that are similar and use the same resources.

Question

Quizplus · Accepted Answer

Yes, the plant wide cost allocation method is best suited for companies that produce similar products and have shared resources. This method involves allocating overhead costs to products based on a single predetermined overhead rate that is applied to the entire plant's production. It is not suitable for companies that have vastly different products or use resources differently.

The Plant Wide Cost Allocation Method Should Be Used by Companies