Which one of the following methods is not a valid approach to calculating overhead absorption rates?

Question

Quizplus · Accepted Answer

Percentage of production cost is not a valid approach to calculating overhead absorption rates because production costs can include variable costs, such as direct materials and direct labour, which do not necessarily reflect the amount of overhead incurred. The other methods (percentage of direct labour, rate per labour hour, rate per machine hour) are all based on more directly measurable factors that can be used to allocate overhead costs.

Which One of the Following Methods Is Not a Valid