When a Manufacturing Company Has a Highly Automated Manufacturing Plant

question 47

Multiple Choice

When a manufacturing company has a highly automated manufacturing plant producing many different products,what is probably the most appropriate basis of applying overhead costs to work-in-process?

• A) Direct labor hours.
• B) Direct labor dollars.
• C) Machine hours.
• D) Cost of materials useD.
• Machine hours would more closely reflect the usage of the automated equipment.

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Definitions:

Deflation

A decrease in the general price level of goods and services in an economy over a period, often leading to increased purchasing power of the currency.

Inflation

The rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Disinflation

A reduction in the rate of inflation

Underemployed

Refers to individuals working fewer hours than they would prefer, or in positions that don't fully utilize their skills and education.