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

Question

Quizplus · Accepted Answer

In a highly automated manufacturing plant, machine hours are a more appropriate basis for applying overhead costs because the production process relies more on machinery than on labor.

When a Manufacturing Company Has a Highly Automated Manufacturing Plant