The fact that one department may be labor intensive while another department is machine intensive explains in part why multiple predetermined overhead rates are often used in larger companies.

A. True.
b. False.

True

Explanation:

Plant wide overhead rate occurs when one predetermined overhead percentage is used for the entire factory and it is commonly used in smaller companies. In large companies, multiple predetermined overhead rates are used.

In a multiple predetermined overhead rate system, every production department have its own predetermined overhead rate. Even though the system is more complex, it is more accurate because it shows the differences across departments about how overhead costs are incurred. For example, there may be allocation of overhead based on machines hours in the departments that are machine intensive.

a

explanation:

reducti0n

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