Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period?
A)Plantwide overhead rate method and departmental overhead rate method.
B)Cost pool overhead rate method and plantwide overhead rate method.
C)Departmental overhead rate method and activity-based costing.
D)Activity-based costing and plantwide overhead rate method.
E)Departmental overhead rate method and cost pool overhead rate method.

Question

Quizplus · Accepted Answer

The departmental overhead rate method and activity-based costing both result in the use of multiple overhead rates during the same time period. In the departmental method, different overhead rates are used for each department based on the different overhead costs incurred by each department. In activity-based costing, overhead costs are assigned to cost pools based on the activities that drive those costs, and different overhead rates are then calculated for each cost pool.

Which Types of Overhead Allocation Methods Result in the Use