Several machines are used in the factory to manufacture a simple product.What is an appropriate cost driver for the depreciation expense on the machines?
A)number of advertisements
B)number of service calls
C)number of machine hours
D)number of hours spent servicing defective products

Question

Quizplus · Accepted Answer

Depreciation expense on machines is directly related to the number of machine hours used in production. Therefore, number of machine hours is an appropriate cost driver for this expense. A) number of advertisements and B) number of service calls are not related to the use of machines and D) number of hours spent servicing defective products relates to a separate expense category.

Several Machines Are Used in the Factory to Manufacture a Simple