Which of These Are Possible Cost Drivers Under Activity-Based Costing

question 10

Multiple Choice

Which of these are possible cost drivers under activity-based costing?

• A)Number of deliveries.
• B)Hours of storage of raw materials.
• C)Number of set ups of machinery.
• D)All of the above.

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Definitions:

Favorable Spending Variance

A situation where the actual spending is less than the budgeted or expected amount.

Indirect Materials

Small items of material such as glue and nails that may be an integral part of a finished product, but whose costs cannot be easily or conveniently traced to it.

Flexible Budget

A budget that varies or adapts based on fluctuations in activity or volume levels.

Indirect Materials Cost

The cost of materials used in the production process that cannot be directly traced to the product, such as lubricants and cleaning supplies.