Assume that AAA Company's Procurement Department is a centralized service department serving all business units, which of the following would be the MOST appropriate cost driver or assignment basis?

Question

Quizplus · Accepted Answer

The number of purchase orders would be a suitable cost driver for the Procurement Department as it directly relates to the department's activity and workload. The other options do not provide a direct correlation to the department's activities and therefore would not be appropriate cost drivers or assignment bases.

Assume That AAA Company's Procurement Department Is a Centralized Service