Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following is the most appropriate cost driver for the activity 'machine maintenance' in a manufacturing company?

Number of machine hours used

Number of units sold

Number of customer orders

Direct labor hours

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Verified step by step guidance

Understand the concept of a cost driver: A cost driver is a factor that causes a change in the cost of an activity. It is used in activity-based costing to allocate costs to products or services based on their usage of the activity.

Analyze the activity 'machine maintenance': Machine maintenance is directly related to the operation and usage of machines in the manufacturing process. The more the machines are used, the more maintenance they are likely to require.

Evaluate the options provided: Consider each option and its relevance to machine maintenance. For example, 'Number of machine hours used' directly correlates with machine usage, while 'Number of units sold,' 'Number of customer orders,' and 'Direct labor hours' are not directly related to machine maintenance.

Determine the most appropriate cost driver: Since machine maintenance is influenced by the extent of machine usage, the 'Number of machine hours used' is the most logical and appropriate cost driver for this activity.

Conclude the reasoning: The 'Number of machine hours used' is the best choice because it directly measures the factor that drives the cost of machine maintenance, ensuring accurate cost allocation in activity-based costing.