Question

The cost object of the plantwide overhead rate method is:

A. The unit of product.
B. The production departments of the company.
C. The production activities of the company.
D. Manufacturing cost pools.
E. The time period.

Answer 1

Answer:

The correct answer is letter "A": The unit of product.

Explanation:

A plantwide overhead rate is a single overhead rate given typically in smaller firms to allocate manufacturing overhead costs to products or cost objects. The rate is implemented when services provided by the different units of the company are undifferentiated. Then, the cost object used in the plantwide overhead rate is the unit of product.