ACCA MA · Chapter 9 · Question 4 of 11
In activity based costing, which is the most appropriate cost driver for machine set-up costs?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Number of set-ups
Explanation
A cost driver is the factor that causes the cost of an activity. Set-up costs depend on how many times machines are set up (usually once per batch), not on the number of units in each batch.
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