Patel Catering Service uses an activity-based costing system.What is the most appropriate cost driver for the activity of preparing meals?
A)Number of meals prepared
B)Number of orders taken
C)Number of rolls used
D)Rent on building

Question

Quizplus · Accepted Answer

The number of meals prepared is the most appropriate cost driver for the activity of preparing meals as it directly affects the amount of resources required, such as ingredients and labor, to prepare the food. The other options, such as number of orders taken or number of rolls used, may not be as closely related to the amount of resources needed to prepare the meals. Rent on building is not a relevant cost driver for this activity.

Patel Catering Service Uses an Activity-Based Costing System