Which of the following is an important feature when considering the use of a single plantwide factory overhead rate? a.It is easy to use. b.It is often inaccurate. c.It is expensive to use. d.It is complex to use

Which of the following is an important feature when considering the use of a single plantwide factory overhead rate? a.It is easy to use. b.It is often inaccurate. c.It is expensive to use. d.It is complex to use

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter27: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 10DQ: Why is the direct labor cost category eliminated in many lean manufacturing environments?

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

Which of the following is an important feature when considering the use of a single plantwide factory overhead rate?

a.It is easy to use.

b.It is often inaccurate.

c.It is expensive to use.

d.It is complex to use.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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