Which of the Following Statements About Using a Plantwide Overhead

question 272

Multiple Choice

Which of the following statements about using a plantwide overhead rate based on direct labor is correct?

• A) Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
• B) Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs.
• C) It is often overly simplistic and incorrect to assume that direct labor-hours is a company's only manufacturing overhead cost driver.
• D) 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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Definitions:

Local Optimum Solution

A solution to an optimization problem that is better than or equal to all nearby solutions but not necessarily the best overall, or global, solution.

Nonlinear Optimization Models

Mathematical models where the objective function or any of the constraints are nonlinear, used for solving complex real-world problems.

Emergency Rooms

Hospital departments designed to provide immediate medical treatment to patients with acute illnesses or injuries.

General Integer Variables

Variables in mathematical models that can take only integer values, often used in optimization problems.