A Firm Has Many Products, Some Produced in an Automated

Multiple Choice

A firm has many products, some produced in an automated production process and some produced in a manual production process.Using direct labor hours to assign manufacturing overhead to a product manufactured with a highly automated process is likely to:

A) Overstate overhead of the product.
B) Understate overhead of the product.
C) Overapply overhead to the period.
D) Underapply overhead to the period.
E) Have no effect on overhead of the product.