Which of the following statements about using a plantwide overhead rate based on direct labor is correct? 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. Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
Which of the following statements about using a plantwide overhead rate based on direct labor is correct? 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. Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 13MC: Activity-based costing systems: A. use a single predetermined overhead rate based on machine hours...
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