Term
| Cost Distortion occurs when... |
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Definition
| some products are overcosted while other products are undercosted by the cost allocation system |
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Term
| Why do Dell and Light to Mairne Corps use refined cost allocatino systems? |
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Definition
| Because simple cost allocation systems don't always do a good job of matching the cost of overhead resources with the products that consume those resources |
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Term
| Plantwide Overhead Rate is also known as what? |
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Definition
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Term
| Why is Predetermind MOH rate known as plantwide overhead rate? |
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Definition
| any job produced in the plant, whether it be treadmills, elliptical cross-trainers, or stair climbers, would be allocated MOH using this single rate. |
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Term
| What are Departental Overhead Rates used for? |
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Definition
| to allocate manufacturing overhead to jobs or products based on the extent to which each product uses the different manufacturing departments. |
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Term
| What is the formula for Predetermined MOH Rate? |
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Definition
Total estimated manufacturing overhead costs /
Total estimated amount of the allocation base |
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