Direct labour hours would be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively.

Question

Quizplus · Accepted Answer

Direct labour hours would not be the most appropriate cost allocation base for a Machining Department that uses machine robotics extensively. Machine robotics perform the bulk of the work in such a department, so it would be more appropriate to use a cost allocation base that accounts for the use of machines, such as machine hours or machine setups. Direct labour hours may be a more appropriate cost allocation base in departments where human labour is the main input.

Direct Labour Hours Would Be the Most Appropriate Cost Allocation