1. Describe one advantage and one disadvantage of prorat-

ing overapplied or underapplied overhead.

2. Describe an important cost-benefit issue involving

accuracy versus timeliness in accounting for overhead.

3. When a single, volume-based cost driver (or activity

base) is used to apply manufacturing overhead, what is the managerial accountants primary objective in select- ing the cost driver?

4. Describe some costs and benefits of using multiple overhead rates instead of a plantwide overhead rate.

5. Describe the process of two-stage cost allocation in the development of departmental overhead rates.