Which of the Following Would Likely Be the Most Appropriate

question 90

Multiple Choice

Which of the following would likely be the most appropriate cost driver to allocate machinery set-up costs to products?

• A)Machine hours
• B)Direct labor hours
• C)Number of production runs
• D)Repair work orders

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Definitions:

Prime Costs

The total cost of direct materials and direct labor incurred in the production of goods.

Conversion Costs

The combination of labor costs and overhead costs that are incurred to convert raw materials into finished goods.

Direct Labor Cost

The total cost of wages paid to workers directly involved in the production of goods or services, excluding benefits and overtime.

Manufacturing Process

The series of operations involved in the production of goods, encompassing everything from raw materials to finished product stages.