In calculating a predetermined overhead rate a recent trend in automated manufacturing operations is to choose an activity base related to
A) direct labor hours.
B) indirect labor dollars.
C) machine hours.
D) raw materials dollars.

Question

Quizplus · Accepted Answer

Automated manufacturing operations heavily rely on machinery and equipment. Therefore, machine hours would be the best choice for determining the activity base for calculating the predetermined overhead rate. This method ensures that overhead costs are properly allocated to products based on the usage of machinery and equipment, which is the most significant factor driving overhead costs in automated manufacturing operations.

In Calculating a Predetermined Overhead Rate a Recent Trend in Automated