Which of the Following Statements About the Use of Direct

Multiple Choice

Which of the following statements about the use of direct labour as a cost driver is false?

A) Direct labour is the most commonly used cost driver in traditional product costing systems when calculating a predetermined overhead rate.
B) Direct labour is gaining importance in many manufacturing applications with respect to being a significant cost driver.
C) Direct labour is an inappropriate cost driver to use if a company is highly automated.
D) If direct labour is a good cost driver, increases in direct labour are matched with increases in manufacturing overhead.
E) Companies can use either direct labour cost or direct labour hours as a cost driver.