Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves?
A)Machine-hours
B)Power consumption
C)Direct labor-hours
D)Machine setups

Question

Quizplus · Accepted Answer

In a highly automated manufacturer, the use of direct labor is likely to be very limited, making it an inefficient allocation base. The use of machine-hours or machine setups would be more appropriate for allocating overhead in this type of manufacturing environment, as they would better reflect the usage of the equipment and resources. Power consumption could also be a reasonable allocation base, depending on the energy needs of the automated machinery.

Which of the Following Would Probably Be the Least Appropriate