Which Would Be an Appropriate Cost Driver for the Machining

question 3

Multiple Choice

Which would be an appropriate cost driver for the machining activity cost pool?

• A) Machine setups
• B) Purchase orders
• C) Machine hours
• D) Inspections

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production.

Marginal Product

The extra output that comes from increasing a particular input by one unit, while keeping all other inputs unchanged.

Marginal Revenue Product

The extra revenue generated by employing one more unit of a factor, such as labor or capital.

Marginal Revenue Product

The additional revenue generated from using one more unit of a resource.