Question

Which of the following is a possible activity driver for allocating the payroll department costs of an organization?

a.Machine hours
b.The number of material moves
c.Maintenance hours
d.The number of employees

Answer 1

The number of employees is the most likely activity driver for allocating payroll department costs, as payroll expenses are directly related to employee count.

Step-by-step explanation:

The activity driver for allocating the payroll department costs of an organization is likely related to the number of employees. This is because payroll costs generally vary with the number of people employed by the company. Machine hours, material moves, and maintenance hours are typically not related to payroll costs but to production-related activities. When wages rise, companies might invest in more machinery, which could impact the number of employees needed, but the number of employees remains the most direct driver for payroll cost allocation.