Departmental overhead rates are generally preferred to plant-wide overhead rates when:

- the activities of the various departments in the plant are not homogeneous.

- the activities of the various departments in the plant are homogeneous.

- most of the overhead costs are fixed.

- all departments in the plant are heavily automated.

Question

Business

Mckenzie Webster

4 January, 02:12

Departmental overhead rates are generally preferred to plant-wide overhead rates when:

- the activities of the various departments in the plant are not homogeneous.

- the activities of the various departments in the plant are homogeneous.

- most of the overhead costs are fixed.

- all departments in the plant are heavily automated.

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Answers (1)

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Clayton · Answer 1

The correct answer to the given question is option A) when the activities of various departments are not homogeneous.

Explanation:

Departmental overhead rates can be defined as the expense rate which are calculated for each and every department in production process. So at every stage of production process this overhead rate is different, where each department would perform some selected steps, in order to complete the production process. Here this rate would be preferred when the activities of the various departments involved in production process performs heterogeneous or different activities.