Plantwide overhead rates provide a less accurate computation of factory overhead than departmental overhead rates

Question

Quizplus · Accepted Answer

Plantwide overhead rates allocate all overhead costs to all products based on a single predetermined rate. This can result in over or underestimating costs for individual products. Departmental overhead rates allocate overhead costs more specifically to each department, providing a more accurate computation of factory overhead.

Plantwide Overhead Rates Provide a Less Accurate Computation of Factory