The choices below depict five costs of Garfield Industries and a possible driver for each cost. Which of these choices likely contains an inappropriate cost driver?
A) Gasoline consumed; number of miles driven.
B) Manufacturing overhead incurred in a heavily automated facility; direct labor hours.
C) Sales commissions; gross sales revenue.
D) Building maintenance cost; building square footage.
E) Human resources department cost; number of employees.

Question

Quizplus · Accepted Answer

Manufacturing overhead in a heavily automated facility is more accurately driven by machine hours or automation levels rather than direct labor hours, as automation reduces the reliance on human labor.

The Choices Below Depict Five Costs of Garfield Industries and a Possible