Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

A) Machine-hours
B) Direct labor-hours
C) Number of orders processed
D) Cost of materials purchased

Question

Ranjan Kumar · Accepted Answer

Final Answer : C, Explanation :  The number of orders processed would be the most accurate measure of activity for allocating costs in the purchasing department, as the department is responsible for processing orders and placing orders with suppliers. Machine-hours and direct labor-hours would be more appropriate measures of activity for allocating costs in a manufacturing or production department. Cost of materials purchased would be more appropriate for allocation in the materials management or inventory control department.

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

A) Machine-hours
B) Direct labor-hours
C) Number of orders processed
D) Cost of materials purchased

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Learning Objectives

Learning Objectives

Related questions

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?A) Machine-hoursB) Direct labor-hoursC) Number of orders processedD) Cost of materials purchased

Definitions

Learning Objectives

Learning Objectives

Related questions

Which of the following would probably be the most accurate measure of activity to use for allocating the costs associated with a factory's purchasing department?

A) Machine-hours
B) Direct labor-hours
C) Number of orders processed
D) Cost of materials purchased