Which cost driver is most appropriate to allocate overhead for a call center?

While total sales dollars may indicate revenue generation, it does not reflect the operational costs associated with servicing customers in a call center. This metric can misrepresent overhead allocation, as higher sales do not necessarily correlate with increased customer interactions that drive call center costs.

Although the number of labor hours is important for tracking employee productivity and labor costs, it does not adequately reflect the overhead costs tied to the volume of customer contacts. Labor hours may vary independently of call volume due to factors like staffing levels or operational efficiency, making it less reliable as a cost driver for overhead allocation.

In a call center, material costs are generally minimal compared to labor and overhead costs, which are driven by customer interactions. This choice would not effectively represent the nature of overhead expenses associated with providing services, as call centers typically do not incur significant material expenses.