Question

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

Answer 1

Answer:

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.