Question 1

Which of the following statements is false?

a.Overhead costs are commonly recovered using direct labour hours.

b.Most overheads are not related to time.

c.Overhead costs are the same as common costs and indirect costs.

d.There is no one correct way to share overheads between cost objects.

Question 2

Which of the following is NOT a reason why direct labour hours is the most popular way to share overheads between cost units?

a.In general the larger the job, the more labour is used.

b.Direct labour hours are usually easily measurable, job by job.

c.Most overheads are related to time, as is direct labour hours.

d.Union contracts stipulate that net income, which is the basis for the negotiation of labour rates, be computed in this way.