Which of the Four Types of Cost Drivers-Activity-Based, Volume-Based, Structural

question 47

Multiple Choice

Which of the four types of cost drivers-activity-based, volume-based, structural and executional-are often best related to linear cost estimation methods?

• A) Activity-based only.
• B) Activity-based and volume-based.
• C) Structural and volume-based.
• D) Executional and volume-based.
• E) Structural and executional.

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Definitions:

Added Profit

The additional income earned from an investment, project, or business activity after accounting for all costs and expenses.

Optimal R&D

The most efficient allocation of resources towards research and development activities to maximize innovation and return on investment.

Expenditures

The act of spending money or utilizing resources for various purposes, including paying for goods, services, or obligations.

Expected-Rate-Of-Return

The forecasted percentage gain or loss that an investment is anticipated to generate over a specified period.