What are the advantages and disadvantages of the

Week 5 September 18 th Exam 1 th September 20 So far we have been applying overhead allocation uniformly – overhead should be split accurately among each unit Import lesson to learn in Cost/Managerial Class 1. Read Fine Print of Financial statements 2. Read Financial statements all the way through Three Basic Methods 1. Single Plant wide Rate 2. Multiple Department Rate 3. Activity-Based Costing Single Plant Wide Rate: similar to how we’ve been allocating overhead Cost X % complete = rate Multiple Department Rates – two departments with overhead allocation Activity-Based Costing – the process of determining the cost of the activities are building blocks for allocating indirect costs to products and services 1. Identify activities and estima