Question

which of the following is a disadvantage of the departmental overhead rate method? multiple choice it may fail to accurately assign many overhead costs that are not driven by production volume. allows each department to have its own overhead rate. allows each department to have its own al tion base. the departmental overhead rate is usually more accurate in overhead allocations than the plantwide overhead rate. the departmental overhead rate is consistent with gaap and can be used for external reporting.

Explanation:

The departmental overhead rate method assumes overhead costs are related to production - volume in each department. However, many overhead costs may not be driven by production volume, leading to inaccurate cost assignments. The other options are either advantages or mis - statements.

Answer:

It may fail to accurately assign many overhead costs that are not driven by production volume.