A widely used activity base for developing factory overhead rates in highly automated settings is
A) direct labor hours
B) direct labor dollars
C) direct materials
D) machine hours

Question

Quizplus · Accepted Answer

In highly automated settings, the use of machines is significant and is directly related to the incurrence of factory overhead costs. Therefore, using machine hours as the activity base for developing factory overhead rates would be the most appropriate choice.

A Widely Used Activity Base for Developing Factory Overhead Rates