Which of the following statements is true?
A) Indirect costs must be allocated based on a single plant wide rate.
B) Manufacturing overhead costs are individually assigned to products.
C) Managers cannot wait until the end of the accounting period for product cost information.
D) Managers can choose to wait until the end of the accounting period to allocate manufacturing overhead costs.

Question

Quizplus · Accepted Answer

Managers need product cost information quickly in order to make informed decisions about pricing, production processes, and profitability. It is not feasible for them to wait until the end of the accounting period to allocate costs, as this may lead to incorrect decisions being made. Indirect costs are usually allocated using a predetermined overhead rate based on a measure such as direct labor hours or machine hours. Manufacturing overhead costs are not individually assigned to products, but rather allocated using a predetermined overhead rate.

Which of the Following Statements Is True