1. If a company decides to increase advertising expense by $25,000, how will that affect the predetermined overhead rate? Eventual cost of goods sold?
2. How can a departmental overhead system be converted to a plantwide overhead system?
3. Describe the difference between producing and support departments.
4. Assume that a company has decided not to allocate any support department costs to producing departments. Describe the likely behavior of the managers of the producing departments. Would this be good or bad? Explain why allocation would correct this type of behavior.