For a labor-intensive manufacturing operation, which of the following would be the most appropriate activity driver?
A)machine hours
B)direct labor hours
C)number of employees
D)units of output

Question

Quizplus · Accepted Answer

A labor-intensive manufacturing operation relies heavily on direct labor, so the most appropriate activity driver would be direct labor hours. This activity driver would best capture the amount of labor required for each unit of output. Machine hours and number of employees may also be relevant activity drivers, but they do not directly capture the labor intensity of the operation. Units of output may be suitable for other types of manufacturing operations, but in a labor-intensive operation, the labor required for each unit is the most important driver of costs.

For a Labor-Intensive Manufacturing Operation, Which of the Following Would