Which of the Following Statements About Using the Direct Labor

Multiple Choice

Which of the following statements about using the direct labor hour method of applying factory overhead to production is false?

A) It may not be as accurate as the direct labor cost method if factory overhead primarily consists of items more closely tied to employee wages,such as benefits.
B) The application base could be substantially smaller than when direct labor cost is used.
C) It is the most appropriate method for a highly automated department.
D) The amount of factory overhead applied is not affected by the mix of labor rates.