In the cost estimation equation TC = F + VX, which of the variables would be considered the cost driver?
A) F
B) V
C) X
D) None of the above

Question

Quizplus · Accepted Answer

The cost driver in the equation TC = F + VX is "X" because it is the variable that directly influences the total cost (TC) by being multiplied by the variable cost per unit (V). The total cost changes in proportion to changes in X.

In the Cost Estimation Equation TC = F + VX