Which of the Following Statements About the Use of Direct

question 17

Multiple Choice

Which of the following statements about the use of direct labor as a cost driver is false?

• A)Direct labor is the most commonly used cost driver when calculating a predetermined overhead rate.
• B)Direct labor is gaining importance in many manufacturing applications with respect to being a significant cost driver.
• C)Direct labor is an inappropriate cost driver to use if a company is highly automated.
• D)If direct labor is a good cost driver,increases in direct labor are matched with increases in manufacturing overheaD.
• E)Companies can use either direct labor cost or direct labor hours as a cost driver.

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Definitions:

Peripheral Countries

Are former colonies that are poor and are major sources of raw materials and cheap labor.

Semiperipheral Countries

Such as South Korea, Taiwan, and Israel, consist of former colonies that are making considerable headway in their attempts to industrialize.

Gross National Product

The total value of all goods and services produced by a country's residents and businesses, regardless of where the production takes place, over a specific time period.

Gross Domestic Product

The total value of all goods and services produced within a country over a specific time period, a primary indicator of economic health.