Question

Overhead rate method is based on readily available information as compared to the plantwide overhead rate method.

1. True
2. False

Answer 1

Answer: False

Step-by-step explanation:

The full question asks about Departmental overhead rate method vs. Plantwide overhead rate method.

Departmental overhead rate means that the company uses a standard rate to apportion its overhead costs to the goods produced by a single segment of the business while a Plantwide rate apportions overhead costs across the entire factory using a single rate.

Both of these are done with readily available information on manufacturing overheads and the activities they are to be apportioned to.