Which of the Following Is Most Likely to Be the Cost

question 137

Multiple Choice

Which of the following is most likely to be the cost driver for the packaging and shipping activity?

• A)Number of setups.
• B)Number of components.
• C)Number of orders.
• D)Hours of testing.
• E)Number of production runs.

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Definitions:

Direct Materials

Raw materials that are directly incorporated into a finished product and can be directly allocated to that product.

Abnormal Spoilage

Waste or defects in the manufacturing process that exceed the normal or expected rate of spoilage, often resulting in additional costs for a company.

Normal Spoilage

The expected amount of waste or loss of materials during a manufacturing process that is considered an unavoidable cost of production.

Operation Costing

A hybrid costing system used in manufacturing goods that combines both job costing and process costing methods.