Tutors-R-Us provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 2010, the firm's information system produced the following data: Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Tutors-R-Us operations for November 2010 included:
Which of these groups of costs are most likely to have a common cost driver?
A) Advertising & computer equipment depreciation
B) Computer equipment depreciation & utilities
C) Utilities & custodial services
D) Utilities & advertising

Question

Tutors-R-Us provides academic enrichment and review activities for high school students in 4 subject areas: English, mathematics, science, and history. In November 2010, the firm's information system produced the following data: Regardless of subject area, clients pay $50 per hour for tutoring services. Costs associated with the Tutors-R-Us operations for November 2010 included:
 Which of these groups of costs are most likely to have a common cost driver?
A) Advertising & computer equipment depreciation 
B) Computer equipment depreciation & utilities 
C) Utilities & custodial services 
D) Utilities & advertising

Quizplus · Accepted Answer

Utilities and custodial services are both related to the facility in which the tutoring services take place. The cost driver for these two expenses may be square footage, number of rooms, or number of clients using the facility. The other choices do not have a clear common cost driver.

Tutors-R-Us Provides Academic Enrichment and Review Activities for High School