The plantwide overhead cost allocation rate is computed by dividing the estimated total manufacturing overhead costs by the estimated total quantity of the cost allocation base.

True or False?

True

Explanation:

The plant wide overhead cost allocation rate is the rate that comes after dividing the estimated total manufacturing overhead by the total estimated cost allocation base i. e estimated machine hours or estimated machine labors

In mathematically,

Plant wide overhead cost allocation rate equals to

= (Estimated total manufacturing overhead) : (Total estimated cost allocation rate)