Drivers That Explain Changes in Costs as Factors Other Than

question 48

Multiple Choice

Drivers that explain changes in costs as factors other than changes in units produced are called:

• A)Functional based cost drivers
• B)Non-unit-based cost drivers
• C)Unit-based cost drivers
• D)None of these

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Definitions:

Indirect Expense

Costs that are not directly linked to the production of goods or services but are necessary for the business's day-to-day operations, such as utilities and rent.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, recognizing it as an expense.

Property

Assets owned by an individual or business, encompassing real estate, personal property, and intellectual property rights.

Net Income

When revenue totals more than expenses, the result is net income.