Fisher and Caplan Company has identified eight employees who are in some way involved with obtaining the raw materials used in the firm's products and has grouped these individuals into a cost pool. These employees' activities range from ordering materials, taking receipt of incoming shipments, and preparing materials for use on the factory floor. Of the following events, which would be a reasonable activity driver for the employees in this cost pool?

Question

Quizplus · Accepted Answer

The activities described for the employees in the cost pool are directly related to the handling of raw materials, including ordering, receiving, and preparing materials for production. Therefore, the number of receipts of raw materials shipments is the most reasonable activity driver, as it directly correlates with the workload and responsibilities of these employees. Labor hours, production runs, and machine setups are less directly related to the specific activities of this cost pool.

Fisher and Caplan Company Has Identified Eight Employees Who Are