If a company's plantwide overhead rate is allocated based on direct labour hours, then each job will be allocated manufacturing overhead based on the total direct labour hours incurred on the job, regardless of the manufacturing department in which those hours were incurred.

Question

Quizplus · Accepted Answer

The statement is true. When a company uses a plantwide overhead rate based on direct labour hours, the manufacturing overhead is allocated to each job based on the total direct labour hours incurred on the job, without considering the manufacturing department where those hours were incurred.

If a Company's Plantwide Overhead Rate Is Allocated Based on Direct