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Homework answers / question archive / During the last 10 months, Arcade Corporation has had the following indirect costs

During the last 10 months, Arcade Corporation has had the following indirect costs

Business

During the last 10 months, Arcade Corporation has had the following indirect costs. It is tryng to determine a good cost driver for the indirect costs. That usage of two potential cost drivers, direct labor hours and machine hours has been recorded over the last 10 months.

Month Indirect Costs Direct Labor Hours Machine Hours
1 $3,200,000 5,000 3,000
2 $3,600,000 5,100 4,300
3 $3,800,000 5,400 3,500
4 $3,500,000 5,200 3,300
5 $2,800,000 5,000 2,900
6 $4,000,000 5,500 4,000
7 $3,500,000 5,100 3,400
8 $3,700,000 5,400 3,800
9 $4,200,000 5,700 4,200
10 $2,500,000 4,500 2,600

Which driver is most closely associated with the indirect costs?

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