Using a plantwide factory overhead rate distorts product costs when: C. products require different ratios of allocation-base usage in each production department. D. significant differences exist in the factory overhead rates used across different production departments.
Plantwide factory overhead rate can be defined as the rate used by companies or organization to allocate or distribute their production overhead costs to product cost.
Formula for calculating Plantwide factory overhead rate is:
Plantwide factory overhead rate=Total overhead rate/Direct labor hours.
Therefore Using a plantwide factory overhead rate distorts product costs when: C. products require different ratios of allocation-base usage in each production department. D. significant differences exist in the factory overhead rates used across different production departments.
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