1. Which of the following statements about using a plantwide overhead rate based on direct labor is correct?

1. Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.
2. Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs.
3. It is often overly simplistic and incorrect to assume that direct labor-hours is a companys only manufacturing overhead cost driver.
4. The labor theory of value ensures that using a plantwide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs.

2. If a company decreases its selling price by $5 per unit due to an decrease in its variable labor cost of $2 per unit, the break-even point in units will:

1. decrease.
2. increase.
3. not change.
4. change but direction cannot be determined.

3. Accounting costs paid to the company.
   1. Direct Labor Cost
   2. Direct Materials Cost
   3. Manufacturing Overhead cost
   4. Selling cost
   5. Administrative cost