The managers of HRY Corporation are analyzing some of their corporate costs to determine the costs of each department's use of administrative services. The accountant wants to allocate the costs of payroll processing using an activity-based costing system. The most appropriate cost driver for the payroll processing cost pool is the
A) Number of pay periods per month
B) Number of employees
C) Average hourly wage for all employees
D) Maximum number of deductions from an individual employee's paycheck

Question

Quizplus · Accepted Answer

The number of employees is the most appropriate cost driver for payroll processing, as the cost is likely to vary with the number of employees being processed.

The Managers of HRY Corporation Are Analyzing Some of Their