MC 32 How does the use of a multiple predetermined overhead rate system differ from a single predetermined overhead rate system?
A. A multiple predetermined overhead rate system uses different overhead rates for different types of products, while a single predetermined overhead rate system uses a single overhead rate for all products.
B. A multiple predetermined overhead rate system is only used in service industries, while a single predetermined overhead rate system is used in manufacturing industries.
C. A multiple predetermined overhead rate system is more accurate than a single predetermined overhead rate system.
D. A multiple predetermined overhead rate system is more simple than a single predetermined overhead rate system.
Answer:A
MC 32 How does the use of a multiple predetermined overhead rate system differ from a single predetermined overhead rate system?
A. A multiple predetermined overhead rate system uses different overhead rates for different types of products, while a single predetermined overhead rate system uses a single overhead rate for all products. B. A multiple predetermined overhead rate system is only used in service industries, while a single predetermined overhead rate system is used in manufacturing industries. C. A multiple predetermined overhead rate system is more accurate than a single predetermined overhead rate system. D. A multiple predetermined overhead rate system is more simple than a single predetermined overhead rate system.
Explanation: A multiple predetermined overhead rate system uses different overhead rates for different types of products, which is more accurate because different products may have different usage of the allocation base. A single predetermined overhead rate system uses a single overhead rate for all products, which is simpler but less accurate.