Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a client that has been allocating overhead just ba

A client that has been allocating Overhead just based on Square Footage in the Plant and...

80.2K

Verified Solution

Question

Accounting

A client that has been allocating Overhead just based on SquareFootage in the Plant and office. For example, if the purchasingdepartment uses 100 square feet to a total of 1000 sq feet, theywill get 10% of overhead allocated to the purchasing department. Arecently added employee discussed ABC accounting for overheadallocation. My question is, what might be one advantage over all ofthe new work required? The costs do not change.

Answer & Explanation Solved by verified expert
3.8 Ratings (399 Votes)
The biggest disadvantage of allocating overhead on the basis of traditional costing is that the allocation may be on some arbitrary basis without direct causeandeffect relationship between the cost and the cost centerThis leads to distortion of cost informationie    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

A client that has been allocating Overhead just based on SquareFootage in the Plant and office. For example, if the purchasingdepartment uses 100 square feet to a total of 1000 sq feet, theywill get 10% of overhead allocated to the purchasing department. Arecently added employee discussed ABC accounting for overheadallocation. My question is, what might be one advantage over all ofthe new work required? The costs do not change.

Other questions asked by students

Q

Explain the negative feedback loop between baroreceptors, the cardiovascular (CV) center, and the heart. Address: dropping...

Medical Sciences
Q

Product strategy Of JAGUAR F-PACE in marketing

Economics
Q

The Equation of motion for the standard mass-spring-damper system is Mẍ + Bẋ + Kx = f(t). Given...

Mechanical Engineering
Q

The coding strand of a DNA molecule that encodes an mRNA molecule has the same...

Biology
Q

EV Part 1 of 3 HW Score 70 14 of 20 points O Points 0...

Basic Math
Q

0 9 10 4 10 8n 78 A All real numbers B 6 n 5...

Algebra
Q

Accounting
Q

Gwyniowych w Chorontal with the wanneer only one piece on Performance Indicator wer

Accounting
Q

2. Explain why consolidated financial statements are useful to the users of financial statements (as...

Accounting
Q

What is the difference between a significant deficiency and a material weakness as it relates...

Accounting
Q

CHART OF ACCOUNTS Kornett Company General Ledger ...

Accounting
Q

Sugar, Inc. sells $569,300 of goods during the year that have a cost of $448,600....

Accounting