Asked by Pablo Ramirez 5 on May 21, 2024
Verified
A primary driver of overhead costs in continuous manufacturing operations is:
A) direct labor dollars.
B) direct labor hours.
C) machine hours.
D) machine maintenance dollars.
Overhead Costs
Indirect costs of running a business that are not directly tied to producing a good or service, such as rent, utilities, and administrative expenses.
Machine Hours
The total hours that machinery is operated in the production process, used in costing and operational efficiency analysis.
- Comprehend the method of allocating overhead expenses in process costing.
Verified Answer
SN
Simran NeeruMay 26, 2024
Final Answer :
C
Explanation :
Overhead costs in continuous manufacturing operations are primarily driven by the use of machines, not direct labor. Therefore, the best choice is C, machine hours. Machine maintenance dollars may be a factor, but this would be a subset of the overall machine hours cost. Direct labor dollars and hours may contribute to overhead, but they are not the primary driver.
Learning Objectives
- Comprehend the method of allocating overhead expenses in process costing.
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