For a labour-intensive manufacturing operation, which of the following would be the most appropriate cost driver?
A) machine hours
B) direct labour hours
C) number of employees
D) units of output

Question

Quizplus · Accepted Answer

For a labour-intensive manufacturing operation, the most appropriate cost driver would be the direct labour hours. This is because the amount of labour required is directly proportional to the amount of cost incurred. Therefore, by allocating the cost to the amount of direct labour hours used, we can accurately determine the cost of each unit produced. Other cost drivers such as machine hours, number of employees, and units of output, may not be as accurate as direct labour hours in determining the cost of production.

For a Labour-Intensive Manufacturing Operation, Which of the Following Would