In the process of applying overhead using multiple production department rates, overhead costs are directly traced to support and production departments and are then allocated to production departments based on the amount of support activity used by each department.

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In this process, overhead costs are initially traced to both support and production departments. Subsequently, the costs from support departments are allocated to production departments based on the level of support activity each production department utilizes, ensuring a more accurate distribution of overhead costs.

In the Process of Applying Overhead Using Multiple Production Department