Some Companies Choose to Have More Detailed Manufacturing Overhead (MOH)

Multiple Choice

Some companies choose to have more detailed Manufacturing Overhead (MOH) allocations and then calculate a MOH rate for each of their departments. What is the correct formula to calculate a departmental rate?

A) Total MOH costs in a department's cost pool × Total quantity of department's cost driver
B) Total MOH costs in a department's cost pool/Total quantity of department's cost driver
C) Total quantity of department's cost driver + Total MOH costs in a department's cost pool
D) Total quantity of department's cost driver/Total MOH costs in a department's cost pool