This method also fails to give full recognition to
the element of the time which is of prime importance in the accounting for and treatment
of manufacturing overhead expenses except in so far as the amount of wages is a product
of the rate factor multiplied by the time factor. Thus, the time factor is taken into
consideration only indirectly or partially in the computation of the overhead percentage
rate. This method therefore, cannot be depended upon to produce very accurate results
where the same type of work is performed in the same time by different type of workers,
skilled and unskilled, with varying rates of pay.
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