Use the following information for the next 2 questions.
Flowing Wells Corporation is preparing its annual budget. As part of its analysis of the contribution of individual products to overall profitability, the controller estimates the amount of overhead that should be assigned to the individual product lines. Budgeted inspection costs are $4,800. Additional information is as follows:
-Which of the following is the best cost driver for the activity "distributing products" if the final cost object is the product?
A) Number of trucks in the fleet of delivery vehicles
B) Total pounds of product delivered
C) Direct labor hours used in producing the products
D) The number of people who work in the distribution activity

Question

Use the following information for the next 2 questions.
Flowing Wells Corporation is preparing its annual budget. As part of its analysis of the contribution of individual products to overall profitability, the controller estimates the amount of overhead that should be assigned to the individual product lines. Budgeted inspection costs are $4,800. Additional information is as follows: 
-Which of the following is the best cost driver for the activity "distributing products" if the final cost object is the product?
A) Number of trucks in the fleet of delivery vehicles 
B) Total pounds of product delivered 
C) Direct labor hours used in producing the products 
D) The number of people who work in the distribution activity

Quizplus · Accepted Answer

The total pounds of product delivered is the best cost driver for distributing products because it directly correlates with the volume and weight of the products being distributed, which impacts distribution costs.

Use the Following Information for the Next 2 Questions