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Sagot :
The cost object of the plantwide overhead rate method is the unit of product.
Plantwide Overhead Rate Method
- When a business allocates all of its manufacturing overhead expenses to products or cost items, it does so using a single overhead rate known as the plantwide overhead rate.
- In smaller organizations with straightforward cost structures, it is most frequently used.
- Instead of using a single plantwide overhead rate, the usual business uses a limited number of cost pools that are each allocated with a variable overhead rate.
- While doing so increases the amount of time needed to close the books, it also increases the accuracy of overhead allocation.
- As a result, there is a trade-off between the increased financial statement accuracy brought on by the additional accounting work required to track and distribute numerous cost pools.
To learn more about the Plantwide Overhead Rate Method refer to:
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