EXERCISE 3-9 (15 MINUTES)

3. Yes; if some jobs required a large amount of machine time and little la-

bor cost, they would be charged substantially less overhead cost if a

plantwide rate based on direct labor cost were being used. It appears,

for example, that this would be true of Job 203 which required consid-

erable machine time to complete, but required only a small amount of

labor cost.

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