of the following statements about ect labor is correct?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question 12?
Transcribed Image Text:QUESTION 12
Which of the following statements about using a plantwide overhead rate based
on direct labor is correct?
Using a plantwide overhead rate based on direct labor-hours will ensure that
direct labor costs are correctly traced to jobs.
Using a plantwide overhead rate based on direct labor costs will ensure that
direct labor costs will be correctly traced to jobs.
It is often overly simplistic and incorrect to assume that direct labor-hours is a
company's only manufacturing overhead cost driver.
The labor theory of value ensures that using a plantwide overhead rate based
on direct labor will do a reasonably good job of assigning overhead costs to
jobs.
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