Which of the following statements is true with regard to the departmental overhead rate method?
A)It is logical to use this method when overhead resources are consumed by various products in substantially the same way throughout multiple departments.
B)It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments.
C)Each department has the same rate for the same activity pool.
D)It requires one overhead cost pool and one rate.
E)It is the same as activity-based costing.

Question

Quizplus · Accepted Answer

The departmental overhead rate method is logical to use when overhead resources are consumed by various products in substantially different ways throughout multiple departments. This method allows for more accurate allocation of overhead costs by recognizing that different departments may incur different types and amounts of overhead.

Which of the Following Statements Is True with Regard to the Departmental