Which of the Following Is an Appropriate Cost Driver for Setting

question 147

Multiple Choice

Which of the following is an appropriate cost driver for setting up production equipment for a production run?

• A) Machine hours
• B) Number of setups
• C) Setup hours
• D) Either number of setups or setup hours would be appropriate

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Definitions:

Ending Work in Process

The total value of goods that are in the production process but are not yet complete by the end of an accounting period.

Beginning Inventory

The worth of products ready for purchase at the beginning of a financial period.

Transferred In

Costs or value brought into a new account or process, often used in manufacturing to describe costs from a previous process carried into another.

Beginning Work in Process

The worth of products that are undergoing manufacturing at the beginning of a financial period.