What Is The Cost Driver !!exclusive!! -

A is the unit of activity that causes a cost to increase or decrease.

Cost drivers generally fall into two main categories based on the type of cost they influence: what is the cost driver

| Cost Incurred | Possible Cost Driver | |---------------|----------------------| | Machine maintenance | Machine hours run | | Quality inspection | Number of inspections | | Purchasing department cost | Number of purchase orders | | Shipping cost | Number of shipments or weight | | Customer support cost | Number of support calls | A is the unit of activity that causes

$$ \textActivity (Driver) \times \textCost per Unit = \textTotal Cost $$ what is the cost driver

These are tied directly to the number of units produced or sold. They are common in traditional manufacturing.