Plantwide overhead rates typically do a better job of matching each department's overhead costs to the products using the department's resources than do departmental overhead rates.

Question

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Departmental overhead rates are more accurate in matching each department's overhead costs to the products using the department's resources because they take into account the specific activities and costs of each department, unlike plantwide overhead rates which spread costs evenly across all products regardless of departmental usage.

Plantwide Overhead Rates Typically Do a Better Job of Matching