Which of the following would be the least appropriate allocation base for allocating overhead in a highly automated (i.e., capital-intensive) manufacturing company?
A) Electricity used.
B) Machine hours.
C) Direct labor hours.
D) Material consumed.

Question

Quizplus · Accepted Answer

In a highly automated manufacturing company, direct labor hours are less relevant as an allocation base because the process relies more on machines than on human labor.

Which of the Following Would Be the Least Appropriate Allocation