Which of the following statements is correct?
A)Overtime premiums should be treated as a component of manufacturing overhead.
B)Overtime premiums should be treated as a component of direct labour.
C)Idle time should be treated as a component of direct labour.
D)Idle time should be accounted for as a special type of loss.
E)Overtime premiums should be treated as a component of manufacturing overhead and as a component of direct labour.

Question

Quizplus · Accepted Answer

Overtime premiums are typically considered part of manufacturing overhead because they are not directly tied to the production of a specific product but rather are a cost of maintaining production capacity.

Which of the Following Statements Is Correct