JC Manufacturing produces products that use a variety of components. Which of the following cost drivers would be the MOST applicable for assigning material handling costs to the finished products?
A) Direct labor hours
B) Direct labor cost
C) Number of units produced
D) Number of components used

Question

Quizplus · Accepted Answer

Material handling costs would be most directly driven by the number of components used in the production process, as the more components there are, the more handling and movement is required to assemble them into the finished product. Direct labor hours and cost may be used to allocate other types of costs, such as manufacturing overhead or direct labor costs respectively, while the number of units produced may not necessarily directly impact material handling costs.

JC Manufacturing Produces Products That Use a Variety of Components