Define the Term "Cost Driver" and Discuss the Factors That

question 38

Essay

Define the term "cost driver" and discuss the factors that are important in the selection of appropriate cost drivers.

---

Definitions:

Drill Bits

Cutting tools used to remove material to create holes, almost always of circular cross-section.

Plant Assembly

This refers to the process of constructing finished goods from raw materials in a manufacturing facility.

Process Costing

An accounting methodology used for homogeneous products, where costs are assigned based on an average per unit, useful for continuous manufacturing settings.

Custom Furniture

Furniture that is specially designed and made according to the unique requirements or specifications of a customer.