Management typically allocates overhead using total raw materials as the basis for the allocation.

Name: Management typically allocates overhead using total raw materials as the basis for the allocation.
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Question

Quizplus · Accepted Answer

Allocating overhead using total raw materials as the basis can be inaccurate as overhead costs may not depend solely on raw materials. It is usually more appropriate to use a cost driver such as labor hours or machine hours for allocation purposes.

Management Typically Allocates Overhead Using Total Raw Materials as the Basis