Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?
A)Machine-hours
B)Direct labor-hours
C)Number of orders processed
D)Cost of materials purchased

Question

Quizplus · Accepted Answer

The number of orders processed is the most accurate measure of activity for the purchasing department because it directly relates to the department's workload and the costs associated with it. It would indicate how many orders the department has to handle and the associated costs, such as shipping, paperwork, and communication with vendors. Machine-hours and direct labor-hours would be more appropriate for allocating costs in manufacturing departments, and the cost of materials purchased does not relate directly to the activity of the purchasing department itself.

Which of the Following Would Probably Be the Most Accurate