TB MC Qu. 04-89 (Static) Which of the following is an...

Which of the following is an advantage of using the plantwide overhead rate method?

Multiple Choice

• It helps distinguish value-added activities from non-value-added activities.

• The necessary information is readily available.

• It emphasizes activities and their costs and arguably better reflects how overhead cost is used in making products.

• Each department has its own overhead rate and its own allocation base.

• It takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources.