Which would be an appropriate cost driver for the warranty services activity?
A) direct labor hours
B) number of service calls
C) number of purchase orders
D) number of batches

Question

Quizplus · Accepted Answer

The number of service calls would be an appropriate cost driver for the warranty services activity as the cost of providing warranty services would likely increase with the number of times customers need to call for service or repair. Direct labor hours (A) and number of purchase orders (C) may not necessarily be directly related to warranty services costs, and number of batches (D) may be more relevant for manufacturing or production-related activities.

Which Would Be an Appropriate Cost Driver for the Warranty