Which of the following is true of a traditional costing system? Uses allocation bases or overhead allocation rates Uses a large number of cost drivers and cost driver rates Allocates overheads to each major activity More accurately approximates product costs as allocates overheads on a cause-a
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Uses allocation bases or overhead allocation rates: True. Traditional costing systems use allocation bases such as direct labor hours or machine hours to allocate overhead costs to products. Show more…
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Which of the following statements is not correct concerning a multiple overhead rate system? A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on direct labor-hours rather than on machine-hours. A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. None of the given answers. A company may choose to create the same overhead rate for each of its production departments.
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