2. The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs. a) True b) False 3. If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process a) True b) False 4. Which of the following statements is not correct concerning multiple overhead rate systems? a) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. b) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. c) A company may choose to create a separate overhead rate for each of its production departments d) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours. 5. The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and or machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Direct labor cost Manufacturing overhead Direct labor-hours Machine-hours Dept. A Dept. B $60,000 $40,000 $90,000 $45,000 6.000 9,000 2,000 15,000 What predetermined overhead rates would be used in Dept. A and Dept. B. respectively a) 67% and $3.00 b) 150% and $5.00 c) 150% and $3.00 2. The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs. a) True b) False 3. If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process a) True b) False 4. Which of the following statements is not correct concerning multiple overhead rate systems? a) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. b) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. c) A company may choose to create a separate overhead rate for each of its production departments d) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours. 5. The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and or machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Direct labor cost Manufacturing overhead Direct labor-hours Machine-hours Dept. A Dept. B $60,000 $40,000 $90,000 $45,000 6.000 9,000 2,000 15,000 What predetermined overhead rates would be used in Dept. A and Dept. B. respectively a) 67% and $3.00 b) 150% and $5.00 c) 150% and $3.00