Which of the Following Is a Disadvantage of the Departmental

Multiple Choice

Which of the following is a disadvantage of the departmental overhead rate method?

A) It may fail to accurately assign many overhead costs that are not driven by production volume.
B) Allows each department to have its own overhead rate.
C) Allows each department to have its own allocation base.
D) The departmental overhead rate is usually more accurate in overhead allocations than the plantwide overhead rate.
E) The departmental overhead rate is consistent with GAAP and can be used for external reporting.