Which of the Following Would Probably Be the Least Appropriate

question 46

Multiple Choice

Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves?

• A)Machine-hours
• B)Power consumption
• C)Direct Labour-hours
• D)Machine setups

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Definitions:

Design Hours

The number of hours allocated or spent on the creative and specification process of product or project development.

Activity-Based Costing

An accounting method that assigns costs to products based on the activities they require, such as ordering materials or setting up machinery.

Product Costs

Encompasses all costs incurred to create a product, including direct materials, direct labor, and manufacturing overhead.

Direct Labor

The expenses related to the salaries of workers who are actively engaged in creating products or providing services.