Which of the following would be an inappropriate cost driver in an activity-based costing system?
A) Number of customer orders
B) Number of units produced
C) Machine hours
D) Any of these are acceptable as long as they are reasonable given the specific cost pool

Question

Quizplus · Accepted Answer

Any cost driver can be used in an activity-based costing system as long as it is reasonable and directly related to the specific cost pool being analyzed. Therefore, all three options listed (number of customer orders, number of units produced, and machine hours) could potentially be appropriate cost drivers depending on the context.

Which of the Following Would Be an Inappropriate Cost Driver