Question: A company using the process cost system has a highly automated factory. Three times each year the factory is closed for one week to perform

A company using the process cost system has a highly automated factory. Three times each year the factory is closed for one week to perform preventive maintenance on the factory equipment. The company charges overhead, including repair and maintenance costs, directly to the Work in Process accounts. Do you think that the company is using the appropriate method to account for overhead?

Explain.

LO.1

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