Determine the appropriateactivity base

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Question: Recently Ryan Smith, the plant manager of the manufacturingdivision of Waterways Corporation, has been focusing on changes tooverhead costs. He realizes that Ben Clark's new designs call formore automation in the plant, but he is also investigating if thereare any opportunities for cost savings.Ryan thought it might be helpful to his cost-cutting measures if hecould predict what manufacturing overhead would be in thefollowing months. But first he needed to determine the appropriateactivity base. He thought there could be two possibilities: direct labour or the number of hours of operation.From historical data, he retrieved the following information:

Reference no: EM133379837

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