A Furniture Manufacturer Has Decided That Its Use of a Single

Multiple Choice

A furniture manufacturer has decided that its use of a single plantwide predetermined overhead allocation rate is no longer accurate.In making the transition to using multiple predetermined overhead allocation rates,which of the following statements is incorrect?

A) In selecting machine usage as the primary cost driver for the Production Department, management feels that there is a direct relationship between the number of machine hours used and the amount of overhead costs incurred.
B) Management must analyze the expected overhead costs and separate them into a cost pool for each department.
C) The allocation process changes because there are now multiple cost pools and multiple allocation bases.
D) The use of multiple predetermined overhead allocation rates is more complex, but it may be more accurate.