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Summary To allocate overhead costs to the Phone and GPS, both of these products use multiple ch

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2024/2025 Written for academic year
Institution Ashford University
Course ACC 205
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To allocate overhead costs to the Phone and GPSTo allocate overhead costs to the Phone and GPS, both of these products use multiple choice 2 none of the activity rates described in the video. their own distinct activity rates. the same activity rates. a combination of their own distinct activity rates plus some activity rates that are shared by the two products.Answer & ExplanationThe correct answer is: a combination of their own distinct activity rates plus some activity rates that are shared by the two products.Explanation:1.Activity-Based Costing (ABC):oIn ABC, overhead costs are allocated based on activities that drive costs rather than a single overhead rate.2.Distinct Activity Rates:oEach product, such as Phone and GPS, may have specific activities unique to them which require distinct activity rates for accurate cost allocation.3.Shared Activity Rates:oSome activities might be common to both products (e.g., general administ

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To allocate overhead costs to the Phone and GPS, both of these products use

multiple choice 2 none of the activity rates described in the video. their own

distinct activity rates. the same activity rates. a combination of their own

distinct activity rates plus some activity rates that are shared by the two

products.




Answer & Explanation


The correct answer is: a combination of their own distinct activity rates plus

some activity rates that are shared by the two products.


Explanation:


1. Activity-Based Costing (ABC):


o In ABC, overhead costs are allocated based on activities that drive

costs rather than a single overhead rate.


2. Distinct Activity Rates:

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  • such as phone and gps
  • to allocate overhead costs to the phone and gpsï
  • both of these products use multiple choice 2 none
  • overhead costs are allocated based on activities
  • may have specific activities u

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