Question

Companies can improve job cost accuracy by using ________. a. a plantwide overhead rate direct-labor hours b. to apply overhead multiple predetermined c. overhead rates number of units in the job d. to apply overhead

Answer 1

Answer: c. multiple predetermined overhead costs

Explanation:

Companies can improve job cost accuracy by using ________.

(A) a plantwide overhead rate

(B) direct-labor hours to apply overhead

(C) multiple predetermined overhead rates

(D) number of units in the job to apply overhead

By applying multiple predetermined overhead costs, companies can improve job cost accuracy. This is because it provides more accurate product costs. It is usually employed in large companies. Here, each department engaged in production runs its own predetermined overhead rate. Though while more complex, is known to be more accurate since it reflects the differences across the various production departments in how overhead costs are incurred, hence, job accuracy is improved significantly.