Which would be an appropriate cost driver for the machining activity cost pool?
A) Machine setups
B) Purchase orders
C) Machine hours
D) Inspections

Question

Quizplus · Accepted Answer

Machine hours are a common cost driver for machining activity since the cost of running and maintaining the machines is directly related to the amount of time they are in use. Choices A, B, and D are not as directly related to the actual machining activity. Machine setups could be a cost driver for the setup activity cost pool, purchase orders could be a cost driver for the ordering activity cost pool, and inspections could be a cost driver for the quality control activity cost pool.

Which Would Be an Appropriate Cost Driver for the Machining