11) Merchandising and service companies, as well as governmental agencies, can use refined cost allocation systems to provide their managers with better cost information.
12) A plant-wide overhead rate is calculated by dividing the estimated total manufacturing overhead costs for the year by the estimated total amount of the allocation base for the year.
13) A plant-wide overhead rate is calculated by multiplying the estimated total manufacturing overhead costs for the year by the estimated total amount of the allocation base for the year.
14) If a company's plant-wide overhead rate is allocated based on direct labor hours, then each job will be allocated manufacturing overhead based on the total direct labor hours incurred on the job, regardless of the manufacturing department in which those hours were incurred.
15) One condition that favors using a plant-wide overhead rate, rather than departmental overhead rates, is that different departments incur different amounts and types of manufacturing overhead.
16) One condition that favors using departmental overhead rates, rather than a plant-wide overhead rate, is that different jobs or products use the departments to a different extent.
17) The estimated total manufacturing overhead costs that will be incurred in each department in the coming year are often referred to as activity cost pools.
18) A departmental overhead rate is calculated by multiplying the estimated total manufacturing overhead costs of the department by the estimated total quantity of the department's cost allocation base.
19) The plant-wide overhead cost allocation rate is computed by dividing the estimated total manufacturing overhead costs of the department by the estimated total quantity of the department's cost allocation base.
20) If a company uses departmental overhead allocation rates, then the amount of manufacturing overhead allocated to the job is equal to the plant-wide overhead rate multiplied by the actual use of the cost allocation base.