D.3 Overhead Costs Flashcards

1
Q

Which method is the only allocation method in which order of allocation matters?

A

STEP DOWN

  • once one dept is allocated, move to next one
  • the second one will what’s left over to be allocated
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2
Q

What’s the reciprocal allocation method?

A

allocates service dept costs to all service depts that use those services

simultaneous eqns

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3
Q

When would you use plant-wide overhead?

A

equal benefits amongst all products from overhead components

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4
Q

When would you use individual dept rates?

A

mfg products differ in resource consumption from individual depts

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5
Q

______ ______ calculates the overhead rate using multiple components leveraging multiple cost drivers.

A

individual method

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6
Q

The _____ ______ calculates the overhead rate using a single cost driver for a department.

A

departmental method

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7
Q

The ____ _____ calculates the overhead rate as total overhead costs divided by a single cost driver.

A

Plant method

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