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Given for firm XYZ, the plantwide rate is $195 per machine hour. If firm XYZ follows departmental allocation method, department 1's allocation rate is $190

Given for firm XYZ, the plantwide rate is $195 per machine hour. If firm XYZ follows departmental allocation method, department 1's allocation rate is $190 per machine hour, department 2's allocation rate is $280 per machine hour, and departmental 3's allocation rate is $180 per machine hour. Which department(s) will be overcosted if costs has been allocated based on the plantwide rate?

Question 17 options:

1 Department 1 and department 3.
2 Department 2, and department 3.
3 Department 1, department 2, and department 3.
4 Department 2 only.

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