1. When there is automation, product diversity, and little correlation between overhead cost and direct labor, a plantwide overhead rate based on direct labor is the most appropriate. a. True b. False

Question

Pamela Fischer

Business

21 February, 16:19

1. When there is automation, product diversity, and little correlation between overhead cost and direct labor, a plantwide overhead rate based on direct labor is the most appropriate. a. True b. False

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Answers (1)

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Lauren Callahan · Answer 1

b. False

Explanation:

It will not be advantageous as a more accurate overhead cost and will have a more effective cost allocation. As it will measure a single type of cost and the expense that include the accounting fees and the advertising except for the direct labor and the direct materials.