Which of the Following Would Be the Most Appropriate Cost

question 88

Multiple Choice

Which of the following would be the most appropriate cost driver to allocate factory electricity costs to products?

• A)Machinery depreciation expense.
• B)Machinery maintenance work orders.
• C)Machinery down-time.
• D)Machine hours.
• E)Machine productivity.

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Definitions:

Salary Workers

Individuals who receive a fixed regular payment, often monthly, from their employer, regardless of the number of hours worked.

Monopsonist

An economic situation where there is only one buyer in the market, giving the buyer substantial power over prices and terms with suppliers.

Purely Competitive

A market structure characterized by many buyers and sellers, all of whom have little to no influence on the market price of goods and services.