D.3 Overhead Costs Flashcards
Which method is the only allocation method in which order of allocation matters?
STEP DOWN
- once one dept is allocated, move to next one
- the second one will what’s left over to be allocated
What’s the reciprocal allocation method?
allocates service dept costs to all service depts that use those services
simultaneous eqns
When would you use plant-wide overhead?
equal benefits amongst all products from overhead components
When would you use individual dept rates?
mfg products differ in resource consumption from individual depts
______ ______ calculates the overhead rate using multiple components leveraging multiple cost drivers.
individual method
The _____ ______ calculates the overhead rate using a single cost driver for a department.
departmental method
The ____ _____ calculates the overhead rate as total overhead costs divided by a single cost driver.
Plant method
