When a manufacturing company has a highly automated manufacturing plant,what is probably the most appropriate basis of applying factory overhead costs to work in process?
A)Machine hours
B)Cost of materials used
C)Direct labor hours
D)Direct labor dollars

Question

Quizplus · Accepted Answer

When a manufacturing company has a highly automated manufacturing plant, the most appropriate basis of applying factory overhead costs would be machine hours as it is more relevant to the amount of overhead used in the production process, rather than relying on direct labor hours or the cost of materials used. Machines are typically what drive the production process in an automated plant and measuring overhead based on machine usage is a more accurate reflection of the true cost of production.

When a Manufacturing Company Has a Highly Automated Manufacturing Plant,what