Fairview Manufacturing uses machine hours to apply manufacturing overhead to pro

Question

Fairview Manufacturing uses machine hours to apply manufacturing overhead to products. This method of costing would likely be acceptable if the company has:

A. a large proportion of unit level activities.
B. a large proportion of unit level activities and fairly consistent consumption ratios among activities.
C. a large proportion of unit level activities and widely varying consumption ratios among activities
D. a large proportion of non-unit level activities.
E. a large proportion of non-unit level activities and fairly consistent consumption ratios among activities.

Explanation / Answer

The answer is C.

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