Assume that a factory seeks to allocate rent to several departments that occupy the factory.The factory is occupied by all of the departments.Which of the following is the most logical cost driver for allocating the factory rent?
A) Number of employees
B) Square footage occupied by each department
C) Machine hours
D) Number of labor hours in each department

Question

Quizplus · Accepted Answer

Square footage occupied by each department is the most logical cost driver for allocating the factory rent as it directly relates to the amount of space each department is utilizing and therefore the amount of rent they should be responsible for. The other options (number of employees, machine hours, and number of labor hours) do not necessarily correlate with the amount of space each department is occupying and may not accurately reflect the allocation of rent.

Assume That a Factory Seeks to Allocate Rent to Several