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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

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BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Which of the following is a nonunit-level driver?

  1. a. Direct labor hours
  2. b. Machine hours
  3. c. Direct materials
  4. d. Setup hours
  5. e. Assembly hours

To determine

Identify the unit which is a not a level driver.

Explanation

Non-Unit Level Activity Drivers:

Non-unit level activity drivers are the factors that compute the utilization of non-unit level activities by products and other objects of costs.

d.

Set up hours is a non-unit level driver. Set up costs is not calculated on the basis of number of units. Set-up costs are not a part of the production costs. Therefore, this option is correct.

a.

Direct labor hours are unit level driver because it is applied to per unit costs. Therefore, this option is incorrect...

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