The Zink Company assigns plant administration costs to the production departments based on the number of employees.Which of the following would NOT be a good combination of common costs with an activity driver?

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Quizplus · Accepted Answer

Assigning purchasing department costs based on machine hours would not be a good combination as the activity driver is not directly related to the purchasing department's function. It would be more suitable to allocate the purchasing department costs based on the value of materials purchased. A common cost and activity driver combination that makes sense is personnel department costs based on the number of employees, as the personnel department is responsible for hiring and managing employees. Cafeteria costs based on meals served and warehouse costs based on the value of materials stored also align with their respective functions.

The Zink Company Assigns Plant Administration Costs to the Production