The activity base for service industries is most likely to be ________.

Question

BlackTom AI · Accepted Answer

Activity base should reflect the primary cost driver; in many service industries the dominant driver is direct labor hours.

1) Relevant knowledge points and concepts
- Activity base (or cost driver) is the measure used to allocate overhead costs to products or services. 
- A good activity base is closely correlated with overhead consumption and is practical to measure. 
- Service industries are typically labor-intensive (billable hours, service delivery time), so labor-related measures often drive overhead.

2) Step-by-step reasoning
- Identify what consumes overhead in a service firm: staff time, supervision, support services, utilities tied to staffing levels. 
- Determine which measurable quantity tracks that consumption most closely: direct labor hours track staff time spent delivering services. 
- Use direct labor hours to allocate overhead because each additional hour of service usually increases use of shared resources proportionally.

3) Illustrative calculation (intermediate steps)
- Suppose total service department overhead = $120,000 and total direct labor hours = 6,000 hours.
- Overhead rate per direct labor hour = $120,000 ÷ 6,000 = $20 per direct labor hour.
- If a job uses 15 direct labor hours, overhead allocated = 15 × $20 = $300.
This shows how DLH provides a straightforward, proportional allocation.

4) Why the correct answer is correct
- Direct labor hours directly measure the main resource in service firms—staff time. They are easy to record (timesheets), correlate well with overhead consumption, and produce equitable allocations across jobs. Thus they are the most likely and appropriate activity base.

5) Why other common bases are less suitable
- Machine hours: appropriate for manufacturing with heavy machine use, not typical for labor-driven services. 
- Units produced/units served: many services are heterogeneous and not uniform units. 
- Direct materials: often minimal in services so poor correlation with overhead. 
- Square footage or number of customers: may be useful for rent or reception overhead but are less directly tied to service delivery effort than DLH.

6) Conclusion
Because service industries are labor-intensive and overhead correlates with staff time, the correct activity base is direct labor hours, matching the provided answer.

The activity base for service industries is most likely to be ________.单项选择题

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