Answer the following statements true (T) or false (F)
1. A modification of the overhead allocation method which uses a single plantwide rate, is to use multiple predetermined overhead allocation rates that have a single allocation base.
2. When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates, the product unit cost may be more accurate.
3. In selecting machine usage as the primary cost driver of overhead costs for the Production Department, management feels that there is a direct relationship between the number of machine hours used and the amount of overhead costs incurred.
4. Managers are able to set an accurate selling price without knowing product cost information.
5. Use of a single plantwide overhead rate assumes that there is a direct relationship between the allocation base and overhead costs in all plant activities.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. TRUE
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