A(n)________ driver is used to allocate costs from an activity-cost pool to a cost object.

Question

Quizplus · Accepted Answer

Activity-cost drivers are used to allocate costs from an activity-cost pool to a cost object, such as a product, service or department. These drivers are chosen based on the cause-and-effect relationship between the cost driver and the activity being performed. Other choices, such as resource-cost or target price do not directly relate to the allocation of costs in the same way. The term primary is too vague to be a viable option.

A(n)________ Driver Is Used to Allocate Costs from an Activity-Cost