You are responsible for updating the predetermined overhead ratefor your company, analyzing the current costs, using projectedchanges, and creating the rate for the next year. You notice themaintenance cost had almost doubled last year compared to prioryears. You need to analyze this situation more and determine waysto better track this increase. The factory manager has suggestedyou spread the costs over all the departments to smooth theincrease.
- Determine a costing system to use to help better analyze theincrease. Explain how this system will allow for future analysis toidentify the increases.
- If the manager pushes to spread the costs, what are the optionsyou have to ensure you are protecting the company from irregularincreases?
