What is a plantwide overhead rate? Why are multiple overhead rates, rather than a plantwide overhead rate, used in some companies? Show
 Q: Describe how a single plantwide overhead allocation rate is used. A: Cost: It refers to the economic value incurred by a company to produce a product or a service. Q: Describe how a single plantwide overhead allocation rate is used. A: Single plant wide rate: Single plant wide rate is the traditional method that is used to allocate… Q: Which of the following statements about using a plantwide overhead rate based on direct labor is… A: Plantwide overhead rate based on direct labour means overhead rate to be calculated which is based… Q: Describe the two-stage process associated with plantwide overhead rates. A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This… Q: Why are some manufacturing firms switching from direct-labor hours to machine hours or throughput… A: Direct labor: Direct labor includes the wages of the employees who are directly involved in… Q: Why is the use of departmental overhead allocation rates considered a refinement over the use of a… A: Departmental overhead allocation rate: Departmental overhead allocation rates are rates that are… Q: Why is the use of departmental overhead allocation rates considered a refinement over the use of a… A: Departmental overhead allocation rate: Departmental overhead allocation rates are rates that are… Q: Why would a manufactury company with multiple production department still prefrer to use a single… A: Following are the reasons that a manufacturing company having multiple production departments use a… Q: What is a predetermined overhead rate and explain why many companies use it? A: The outlays that are not directly related to the production are known as overheads. These can be of… Q: What is a predetermined overhead rate and explain why many companies use it? A: Overhead is an expense which is require in the manufacturing of the goods or product and indirect… Q: What is the total factory overhead? A: Given: Factory Utilities $ 1,500 Indirect Materials Used 37,500 Direct Materials… Q: What happens to overhead rates based on direct labor when automated equipment replaces direct labor? A: Predetermined Overhead Rate: Predetermined overhead rate is a measure used to allocate the estimated… Q: Why do companies use predetermined rather than actual manufacturing overhead rates? A: Manufacturing overhead means indirect costs that are incurred for manufacturing of products and… Q: What are the differences between Underapplied Factory Overhead and Overapplied Factory Overhead? A: Overhead: Overhead cost means expenses referred to indirect cost. The overhead cost like rent,… Q: Why do businesses apply overhead to tasks using fixed rates rather than real manufacturing overhead… A: This question deals with real manufacturing overhead costs: Q: how do I find total over- or underapplied fixed manufacturing overhead? A: Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be… Q: A plantwide factory overhead rate assumes that all overhead is directly related to one activity… A: Factory Overhead rate:Factory overhead is the indirect cost consisting of indirect material,… Q: Use of a plantwide factory overhead rate assumes that the activities causing overhead costs are the… A: Introduction:Plantwide factory overhead rate: The rate at which overheads are allocated to all the… Q: Discuss the reason why companies use predetermined (factory) overhead rates rather than actual… A: Definition: Actual Overhead expenses are the genuine expenses acquired and ordinarily incorporate… Q: Discuss the reason why companies use predetermined (factory) overhead rates rather than actual… A: Manufacturing overheads are the manufacturing costs that could not be directly associated with each… Q: What is the amount of Factory Overhead? A: Factory overhead is the costs incurred during the manufacturing process, not including the costs of… Q: Which types of overhead allocation methods result in the use of more than one overhead rate during… A: Some expenses are not directly related to production, are known as overhead costs. Such overhead… Q: In highly automated manufacturing, the most appropriate base for factory overhead application is:… A: Here, Factory Overhead represent the Indirect Cost that incurred to production in factory other than… Q: Should design of cost be in factory overhead? Explain why A: Factory overheads are the costs related to the manufacture of the goods. Q: Calculate the total absorbtion rate used to apportion manufacturing overhead by? A: The absorption rate is assigned according to the various allocation grounds. Hours of direct work… Q: The use of a plantwide manufacturing overhead rate implies that the activities that cause overhead… A: The Answer Q: Why do companies use predetermined overhead rates rather than actual manufacturing overheadcosts to… A: Click to see the answer Q: Why do companies use predetermined overhead rates rather than actual manufacturing overheadcosts to… A: If actual manufacturing overheads are applied then costs are unknown. if calculated need to wait… Q: Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to… A: If actual manufacturing overheads are applied then costs are unknown. if calculated need to wait… Q: Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to… A: If actual manufacturing overheads are applied then costs are unknown. if calculated need to wait… Q: Why would a manufacturing firm switch from direct labor hours to machine hours as the cost driverfor… A: Direct labor: Direct labor includes the wages of the employees who are directly involved in… Q: Based on this information, if Flawless changes its allocation basis to machine hours, what is the… A: Calculate total overhead costs: Total overhead cost = (300 cases * $30) + (500 cases * $22) + (600… Q: The traditional cost drivers used in computing overhead absorption rates are: A)Direct labor hours,… A: Since you have asked multiple questions, we will solve the first question for you. If you want any… Q: Explain why the fixed manufacturing overhead cost per unit changes when there is a change in the… A: Manufacturing overhead costs: "The costs, which do not relate directly with the manufacturing of… Q: amount of labor that will be charged to factory overhead is A: Number of hours work during the regular shift = 10000 Number of overtime hours for regular shift… Q: how to allocate manufacturing overhead by department? A: Manufacturing overhead costs: The costs, which do not relate openly with the manufacturing of… Q: You have to find out the under or over valued Manufacturing overheads for the company A and B while… A: Formula: Over Valued MOH: Applied MOH>Actual MOH Under Valued MOH: Applied MOH<Actual MOH Q: Which of the following measures is appropriate as a cost driver for machine set up activity costs?… A: Solution: "Number of setups" is appropriate measure as a cost driver for machine set up activity… Q: Required: What is the company's assembly department overhead rate using direct labor hours? The… A: Assembly department overhead rate based on direct labour hours = Estimated manufacturing overhead of… Q: in what way does the accounting treatment of factory overhead differ from that of direct materials… A: Factory overheads: Factory overheads can be defined as the supporting cost incurred in the… Q: In what way does the accounting treatment of factory overhead differ from that of direct materials… A: Factory overheads include all indirect costs incurred during the manufacturing process to maintain… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below. Recommended textbooks for you Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Financial & Managerial Accounting ISBN:9781337119207 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Financial & Managerial Accounting ISBN:9781285866307 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Managerial Accounting: The Cornerstone of Busines... ISBN:9781337115773 Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger Publisher:Cengage Learning Managerial Accounting ISBN:9781337912020 Author:Carl Warren, Ph.d. Cma William B. Tayler Publisher:South-Western College Pub Financial And Managerial Accounting ISBN:9781337902663 Author:WARREN, Carl S. Publisher:Cengage Learning, Financial & Managerial Accounting ISBN:9781337119207 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Cornerstones of Cost Management (Cornerstones Ser... ISBN:9781305970663 Author:Don R. Hansen, Maryanne M. Mowen Publisher:Cengage Learning Financial & Managerial Accounting ISBN:9781285866307 Author:Carl Warren, James M. Reeve, Jonathan Duchac Publisher:Cengage Learning Why are multiple overhead rates rather than a plantwide overhead rate used in some companies?Some companies used multiple overhead rates because plantwide overhead rate is not always accurate which can lead to overapplication on one product and under application on the other. Multiple overhead rates are used by big companies that have a wide variety of cost pools and cost drivers.
Why departmental overhead rates might be used instead of a single plantwide overhead rate?Using departmental overhead rates will better reflect the costs of manufacturing Product A and Product B compared to using a single, plant-wide overhead rate.
Why do companies use a predetermined overhead rate rather than an actual overhead rate multiple choice question?Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs? if actual manufacturing over head cost is applied to jobs, the company must wait until the end of the accounting period to apply overhead and to cost jobs.
When should you use a plantwide overhead rate?Plantwide Overhead Rate Method The plantwide overhead rate method is practical when (1) overhead costs are closely related to production volume, or (2) a company produces only one product.
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Why are multiple overhead rates used rather than a plantwide overhead rate in some companies?
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