Everest Co.uses a plantwide factory overhead rate based on direct labor hours.Overhead costs would be overcharged to which of the following departments?
A) A labor-intensive department
B) A capital-intensive department
C) A materials-intensive department
D) All of the above

Question

Quizplus · Accepted Answer

A labor-intensive department would have a higher proportion of direct labor hours compared to the other two types of departments. Therefore, a plantwide factory overhead rate based on direct labor hours would overcharge overhead costs to a labor-intensive department.