Answer:
All the options are True except for option D
Explanation:
All the options are True except for option D.
The statement D, that departmental overhead rate method does not assign overhead on the basis of volume related measures is incorrrect . This is based on the reason that the departmental overhead rate method assigns overhead on the basis of volume-related measures. It is also a much more polished method than the plant-wide overhead rate method.
Answer:
D. The departmental overhead rate does not assign overhead on the basis of volume-related measures.
Explanation:
The departmental overhead rate refers to the method of evaluating the cost associated with a department. It is the expense calculated for each department in a factory production production process.
To evaluate what is true from the options, we need to examine the characteristics of the departmental overhead method.
Option A is true. The department overhead method assigns overhead on the basis of volume-related measures. This is in fact a major disadvantage of the department overhead method.
Option B is true. The department overhead rate is a more refined cost evaluation method than the plantwide overhead rate. The plantwide overhead rate is a single overhead rate that a company uses to allocate all of its manufacturing overhead costs to products or cost objects. while the departmental overhead rate allocates cost per department. This makes it more detailed than the plantwide overhead rate.
Option C is true. The costing accuracy is improved by using multiple departmental rates rather than a single overhead rate. This is because costs are captured at a departmental level, reducing room for errors and unnecessary estimates. Thus, making them more accurate.
Option D is false. This is because the departmental overhead rate method assigns cost on the basis of volume related measures.
This makes option D the correct answer
Option E is true. As the departmental overhead rate is more costly to implement and requires a lot more resources than plantwide overhead rate. This is so because the departmental overhead rate is done per production department.
