Question

Which of the following is an example of a unit-based activity driver?

1) Direct labor hours
2) Engineering change orders
3) Inspection hours
4) Material moves

Answer 1

Direct labor hours are an example of a unit-based activity driver as they are directly proportional to the units produced and are used in cost assignment.

Step-by-step explanation:

An example of a unit-based activity driver from the given options is Direct labor hours. This is because unit-based drivers are used to assign costs in a costing system relative to the units produced, and direct labor hours are directly proportional to the number of units produced. Other examples such as engineering change orders, inspection hours, or material moves may not have a direct correlation with the number of units and might be considered non-unit-based or transaction-based activity drivers.