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Departmental overhead rates may correctly assign overhead costs when: A) there is no cause-and-effect relation between direct labor hours and the cost of overhead. B)

Departmental overhead rates may correctly assign overhead costs when:

A) there is no cause-and-effect relation between direct labor hours and the cost of overhead.

B) products differ regarding the number of units produced, lot size, or complexity of production.

C) identifying activity-based cost pools for the first stage of the allocation process is difficult.

D) there is a high correlation between direct labor-hours and the incurrence of overhead costs.

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