Blanket overhead rate is:

A. One single overhead absorption rate for the whole factory

B. Rate which is blank or nil rate

C. rate in which multiple overhead rates are calculated for each production department, service department etc

D. Always a machine hour rate

Answer: Option A

Solution(By Examveda Team)

Blanket overhead rate is one single overhead absorption rate for the whole factory. It is a common absorption rate used throughout a factory and for all jobs and units of output irrespective of the departments in which they were produced or processed. It is a one single overhead absorption rate for the whole of the factory.