Which of the following would likely be the most appropriate cost driver to allocate machine set-up costs to products?
A)Machine hours.
B)Direct labor hours.
C)Number of production runs.
D)Number of products.
E)Number of purchase orders.

Question

Quizplus · Accepted Answer

Number of production runs is a more appropriate cost driver for machine set-up costs as it directly affects the frequency of set-ups required for each product. The other options, such as machine hours or direct labor hours, do not necessarily have a direct correlation with set-up costs.

Which of the Following Would Likely Be the Most Appropriate