Which of the Following Statements About Using the Direct Labor

question 16

Multiple Choice

Which of the following statements about using the direct labor hour method of applying factory overhead to production is false?

• A)It may not be as accurate as the direct labor cost method if factory overhead primarily consists of items more closely tied to employee wages,such as benefits.
• B)The application base could be substantially smaller than when direct labor cost is used.
• C)It is the most appropriate method for a highly automated department.
• D)The amount of factory overhead applied is not affected by the mix of labor rates.

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Definitions:

Standard Error

The standard deviation of the sampling distribution of a statistic, often the mean, representing the accuracy with which a sample approximates a population.

Confidence Interval

A span of values, obtained from sample information, which is expected to encompass the value of an unidentified population characteristic.

Mean

The arithmetic average of a set of values, calculated by adding all the numbers together and dividing by the count of values.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, showing how much the values differ from the mean.