Fill in the Blank QuestionFill in the blank question.Applying a single overhead rate to all products is known as the overhead rate method.

Fill in the Blank QuestionFill in the blank question.The overhead rate method uses a different overhead rate per production department.

A predetermined overhead application rate is established to apply manufacturing overhead to Blank______.Multiple choice question.finished goodsraw materialswork in processcost of goods sold

Companies use a predetermined overhead rate rather than an actual overhead rate because Blank______.Multiple choice question.it is impossible to calculate an actual ratea predetermined rate is more accuratea predetermined rate is easier to calculate and applyan actual rate is not known until the end of the period

Overhead costs are assigned to production using an overhead application rate, whereas no such "application rate" is used to assign the costs of direct materials and direct labor to production. The reason for this difference in procedures is that:Multiple ChoiceOverhead is an indirect cost which cannot be traced easily and directly to specific units of product.Overhead is always larger in dollar amount than either direct materials or direct labor.The amounts of direct material and direct labor applicable to each unit of production cannot be determined as easily as the amount of overhead.Overhead is always equal to a constant percentage of direct labor costs.

Ignoring your calculations in (A) and (B), compute:a. the manufacturing overhead allocation rate for each activity using ABC,b. the cost to produce one unit of each product line, andc. the profitability of per unit of each product line.