Even departmental overhead rates will not correctly assign overhead costs in situations where a company has a range of products that differ in volume,lot size,or complexity of production.

Question

Quizplus · Accepted Answer

Departmental overhead rates are only effective in assigning overhead costs when the products have similar characteristics. If the products have differences in volume, lot size, or complexity of production, the overhead costs cannot be accurately assigned using departmental overhead rates.

Even Departmental Overhead Rates Will Not Correctly Assign Overhead Costs