What is the rationale for the use of departmental rates rather than plantwide rates?
A) less overapplied or underapplied overhead
B) easier to apply than plantwide rates
C) applying overhead more equitably because plantwide rates are average rates
D) none of the above

Question

Quizplus · Accepted Answer

Departmental rates allow for more accurate distribution of overhead costs based on the specific activities and resources used by each department. Plantwide rates may not accurately reflect the true costs incurred by each department, leading to inequitable allocation of overhead.

What Is the Rationale for the Use of Departmental Rates