Answered

Discover the answers you need at Westonci.ca, where experts provide clear and concise information on various topics. Ask your questions and receive accurate answers from professionals with extensive experience in various fields on our platform. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

Discuss what happens to overhead rates that are based on direct labor when automated equipment replaces direct labor. Would manufacturing overhead increase or decrease

Sagot :

anthougo

Answer:

Manufacturing overhead rates based on direct labor will increase and the total overhead itself will increase as a result of the increased use of equipment instead of direct labor.

Explanation:

When overhead rates are based on direct labor and automated equipment replaces direct labor, the number of direct labor hours will decrease.  This will cause an increase in the predetermined overhead rates since fewer direct labor hours will now divide the same or even an increased level of overhead.  Even the overhead costs will increase from the replacement of direct labor with equipment.

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. Thank you for choosing our platform. We're dedicated to providing the best answers for all your questions. Visit us again. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.