Which of the following cost drivers is often disregarded in a traditional costing system?
A)Pounds of direct material
B)Machine hours
C)Direct labor dollars
D)Variety of products manufactured

Question

Quizplus · Accepted Answer

Traditional costing systems often ignore the variety of products manufactured as a cost driver. Instead, they focus primarily on direct labor, direct materials, and machine hours. However, the number of different products a company makes can significantly impact overhead costs, as more variety requires more set-up time, more equipment, and more space. Ignoring this cost driver can lead to inaccurate product costing and potentially misinformed business decisions.

Which of the Following Cost Drivers Is Often Disregarded in a Traditional