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 meters used to assign costs to activities

Question

Quizplus · Accepted Answer

Cost drivers are activities that cause costs to increase as the activity increases. This means that as the amount of a certain activity increases, the costs associated with that activity will also increase. For example, in manufacturing, the number of units produced is a cost driver because as the number of units produced increases, the costs associated with producing those units will also increase.

Cost Drivers Are