If a company manufactures diverse products using different sets of resources in a plant,it is best to use a plantwide allocation rate.

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If a company manufactures diverse products using different sets of resources, it is not best to use a plantwide allocation rate as this may result in inaccurate cost allocation. Instead, it is recommended to use activity-based costing (ABC), which assigns costs based on the level of activities required to produce each product. ABC provides a more refined allocation rate that takes into account the different resources used for each product.

If a Company Manufactures Diverse Products Using Different Sets of Resources