The most likely cost driver of direct labor costs is the ________.
A) number of machine setups for the product
B) number of miles driven
C) number of production hours
D) number of machine hours

Question

Quizplus · Accepted Answer

Direct labor cost is typically driven by the number of production hours, as this represents the amount of time that employees are directly working on producing the product or service. Machine setups (A) and machine hours (D) may also impact direct labor costs if they require additional labor to operate or maintain the machines, but they are not as direct of a driver as production hours. Number of miles driven (B) is typically more relevant for indirect costs such as transportation expenses.

The Most Likely Cost Driver of Direct Labor Costs Is