Rank the following methods of assigning overhead costs from least accurate to most accurate.
A) departmental rates, plantwide rate, activity-based costing
B) plantwide rate, departmental rates, activity-based costing
C) plantwide rate, activity-based costing, departmental rates
D) activity-based costing, departmental rates, plantwide rate
E) activity-based costing, plantwide rate, departmental rates

Question

Quizplus · Accepted Answer

The plantwide rate is the least accurate as it applies a single overhead rate across the entire plant. Departmental rates are more accurate as they apply different rates for different departments. Activity-based costing is the most accurate as it assigns costs based on actual activities and resource usage.

Rank the Following Methods of Assigning Overhead Costs from Least