Which of the Following Is the Most Appropriate Cost Driver

question 104

Multiple Choice

Which of the following is the most appropriate cost driver for maintaining parts inventory?

• A) Number of parts for a product
• B) Direct labor hours
• C) Sales dollars
• D) Number of setups

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Definitions:

Roundabout Trade

Trade involving multiple countries where goods are exported to one country before being re-exported to the final destination.

Double-Coincidence

The situation in a barter economy where two parties each hold an item the other wants, enabling an exact exchange without the need for a medium of exchange.

Commodity Money

Money whose value comes from a commodity of which it is made, such as gold and silver, used historically as a medium of exchange.

Unit Of Account

A standard numerical monetary unit of measurement that provides a consistent way of quoting prices and conducting economic transactions.