The Term Cost Driver Refers to

question 102

Multiple Choice

The term cost driver refers to

• A)any activity that can be used to predict cost changes.
• B)the attempt to control expenditures at a reasonable level.
• C)the person who gathers and transfers cost data to the management accountant.
• D)any activity that causes costs to be incurred.

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Definitions:

Departmental Overhead Rates

Different rates used to allocate overhead costs to products or job functions, based on department-specific activities.

Direct Labor Hours

The total hours worked by employees who are directly involved in the production process of goods or services.

PVC Fencing

A fencing material made from polyvinyl chloride, known for its durability, weather resistance, and low maintenance requirements.

Plantwide Overhead Rate

A unified rate employed across the entire manufacturing facility to allocate overhead expenses to products.