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The new manager of the insurance division does not understand how the company can have so many overhead rates for assigning costs to the activities of the company's life insurance underpreparers. One rate schedule is used to find out average assignable costs when agents prepare standard policies. Another rate schedule is applied when the agents prepare special policies, and these policies are costed out differently from those categorized as standard policies.

Why might the company use different costing systems, with different overhead rates, for standard and specialized policies?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M993287

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