How do cost drivers related to cost pools


















An activity driver is something that influences the cost of an operation. Activity drivers are used to allocate the costs in secondary cost pools to primary cost pools, as well as to allocate the costs in primary cost pools to cost objects.  · www.doorway.ru Solution Preview. Cost driver is anything which causes resources to be consumed or costs to be incurred. As the same indicates, costs drivers drive costs. That is they cause costs to change as the cost driver changes. Cost Pools are used in Activity Based Costing and are activities . One may also ask, how do cost drivers affect cost behavior? An activity-based costing rate is calculated by assigning indirect costs to a cost pool, Which cost is related to marginal cost? What are fixed costs and what are variable costs? Popular Asks. Is inch big?


A cost driver is the direct cause of a cost, and its effect is on the total cost incurred. For example, if you are to determine the amount of electricity consumed in a particular period, the number of units consumed determines the total bill for electricity. In such a scenario, the units of electricity consumed. www.doorway.ru Solution Preview. Cost driver is anything which causes resources to be consumed or costs to be incurred. As the same indicates, costs drivers drive costs. That is they cause costs to change as the cost driver changes. Cost Pools are used in Activity Based Costing and are activities for which costs are to be measured. Each activity cost pool is then assigned an Activity Cost Driver. With the help of these drivers, the cost is allocated to products. Cost driver analysis is the key to utilizing the concept of ABC Costing to its full potential. Correct activity cost driver determination is vital for effective product costing. There are a lot of management decisions that rely on product costing.


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