Which of the following are the two most common allocation bases for factory overhead?
A) Total overhead dollars and machine hours
B) Direct labor hours and machine hours
C) Direct labor hours and factory expenses
D) Machine hours and factory expenses

Question

Quizplus · Accepted Answer

The two most common allocation bases for factory overhead are direct labor hours and machine hours. These measures are used because they are closely related to the consumption of overhead resources in a factory setting. Direct labor hours represent the amount of time that employees spend working on a product, and machine hours represent the amount of time that machines are used in the production process. Both of these factors have a significant impact on the amount of overhead resources that are consumed, making them reliable allocation bases.

Which of the Following Are the Two Most Common Allocation