In applying costs using a pre-determined overhead rate, the most common allocation base is generally

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Direct labor hours are the most common allocation base because they are directly related to the amount of time and effort required to produce a product or service. This makes them a good indicator of overhead costs, which are indirect costs that cannot be directly traced to a specific product or service. Using direct labor hours as the allocation base allows for a more accurate reflection of the amount of overhead costs contributed by each product or service.

In Applying Costs Using a Pre-Determined Overhead Rate, the Most