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Departmental overhead rates are an expense assigned to products associated with a particular department. Overhead rates help businesses remain within the boundaries of a budget.

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Q: What are departmental overhead rates?
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Departmental overhead absorption rate?

The benefit of determining overhead absorption rates, according to departments is that it is usually hard to pin certain overhead costs to specific products. It is better for each department to relate to a certain overhead than a specific product.


How are departmental rates calculated?

Departmental rates are calculated by dividing the weighted wage rate for the department by the number of employees.


What are the advantages of departmental overhead costs?

Incorporating departmental overhead costs in your prices helps you cover the costs of production. Unfortunately, it may make your price more than your competitors.


What is a blanket overhead absorption rate How will you differentiate between blanket overhead rate and other overhead absorption rate?

In Blanket Overhead Absorption Rate applied is the same however it may differ if a company follow Departmental method Or frther break - up method


What is the difference between a departmental overhead absorption rate to a blanket wide overhead absorption rate?

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What are the advantages of using predetermined overhead rates?

The benefits of using predetermined overhead rates is that budgeting and allocation of cash flows become easier. It also helps the firm to conserve resources to stay within a budget.


It is better to use multiple overhead rates compared to single rate in overhead absorption Discuss statement?

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How is predetermined overhead rates useful in costing?

It allows you to forecast future costs needed to do business.


In a departmental organization what is a gangplank?

In a departmental organization what is a gangplank?


What does overhead mean in regards to accounting?

It is to describe costs of running a business ,e.g. rent rates and salaries


What do you mean by departmental explain departmental briefly?

A department is a subdivision of an organisation - for instance the Geology department is the subdivision that studies/teaches Geology in a University. Therefore 'departmental' means belonging to a department - as in the departmental staff.


Why is overhead allocation under ABC usually more accurate than either the plantwide overhead allocation method or the departmental overhead allocation method?

Because in ABC costing overheads are allocated based on activities performed by departments rather based on any rate or formula that's why as much activity any department perform as much cost will be allocated which is more accurate way of allocation.