Question: How are activity-based rates determined? What is an activity base? Which of the three methods for allocating factory overhead cost to products is better and

How are activity-based rates determined?

What is an activity base?

Which of the three methods for allocating factory overhead cost to products is better and why?

Why would someone choose the multiple production department FOH rate method when it is more complicated to calculate than the single plantwide rate?

How is the selection of the allocation base for a production department made?

How does the activity-based costing method differ from the single plantwide and the multiple production department FOH rate methods?

Which of the three methods for allocating costs of products can lead to significant product cost distortions?

Can activity-based costing be used in service businesses? If so, how?

Why are selling and administrative expenses often allocated by an activity-based costing method rather than sales volume?

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