Which of the following is NOT a limitation of a plantwide overhead rate?
A)Product diversity may consume overhead activities under differing consumption ratios.
B)Overhead usage is not strictly linked to the units produced because some products are more complex and diverse than others.
C)Predetermined rates using budgeted overhead are usually the best estimate of the amount of overhead.
D)Overhead costs tend to be underallocated to highly complex products.

Question

Quizplus · Accepted Answer

Predetermined rates using budgeted overhead are not always the best estimate of the amount of overhead because actual overhead costs and usage may differ from budgeted amounts. The other options are all limitations of a plantwide overhead rate.

Which of the Following Is NOT a Limitation of a Plantwide