Which of the Following Statements Is Incorrect

question 41

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) 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.
• C) An overhead application rate is an historical rate.
• D) The direct labour rate per unit of output is constant but total direct labour costs increase with an increase in the level of production.

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Definitions:

Commercial Units

Standardized units or quantities of goods that are considered acceptable by all parties in a commercial transaction for the purpose of sale or lease.

Conforming

Adhering to or complying with a set standard, rule, or norm.

Non-conforming

Refers to a property or product that does not meet local zoning or building standards.

Shipment Contract

A contract under which a seller turns goods over to a carrier for delivery to a buyer. Both the title and risk of loss pass to the buyer when the goods are given to the carrier.