Which of the Following Statements Is Incorrect

question 2

Multiple Choice

Which of the following statements is incorrect?

• A) Today, with automation and computerisation, factory overhead costs are often a higher proportion of total manufacturing costs than direct labour costs.
• B) An overhead application rate is an historical rate.
• C) The direct labour rate per unit of output is constant but total direct labour costs increase with an increase in the level of production.
• D) A manufacturing entity using a periodic inventory system must rely on the judgement of the accountant and/or the production manager to estimate the value of ending work in process.

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Definitions:

Accommodation Maker

A person who signs a loan instrument to help someone obtain credit but who has no direct benefit from the loan.

Liable

Subject to legal obligation, where an individual or entity is responsible for fulfilling certain duties or compensating for harm caused to others.

Conditions Precedent

Specific conditions that must be fulfilled before a contract or agreement becomes legally binding.

Negotiable Instrument

An official written promise to pay a specified amount of money, which can be demanded at any time or payable at an agreed upon time, identifying the payer on the document.