Why Might a Company Use Direct Labor Cost as an Overhead

question 49

Essay

Why might a company use direct labor cost as an overhead allocation base rather than using direct labor hours?

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Definitions:

Compensatory Damages

Monetary compensation awarded to a plaintiff to indemnify actual losses, expenses, or harm suffered due to the defendant's wrongful conduct.

Punitive Damages

Monetary compensation awarded to an injured party that goes beyond that which is necessary to compensate for losses and is intended to punish the wrongdoer.

Punitive Damages

Financial compensation awarded to a plaintiff in a lawsuit, exceeding simple compensation and intended to punish the defendant for egregious wrongdoing.

Wealth

A measure of the value of all assets of worth owned by a person, community, company, or country.