Cost drivers are:
A) Activities that cause costs to increase as the activity increases
B) Accounting techniques used to control costs
C) Accounting measurements used to evaluate whether or not performance is proceeding according to plan
D) A mechanical basis, such as machine hours, computer time, size of equipment, or square metres of factory, used to assign costs to activities

Question

Quizplus · Accepted Answer

Cost drivers are activities that cause costs to increase as the activity increases. They can be identified and used for cost management purposes. The other options (B, C, D) do not correctly define cost drivers.

Cost Drivers Are