For Each of the Following Activities,identify One Potential Cost Driver

question 45

Essay

For each of the following activities,identify one potential cost driver.
a.
Repair and maintenance of factory equipment
b.
Supplies for factory
c.
Purchasing
d.
Quality control inspections
e.
Machine setups

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short-term financial health and operational efficiency.

Spontaneous Financing

Financing that occurs naturally as a company operates, such as trade credit that increases as sales increase.

Working Capital Accounts

Accounts that reflect a company's current assets minus its current liabilities, providing a snapshot of its short-term financial health and operational efficiency.

Borrowing Rate

The interest rate that a lender charges a borrower for the loan of funds, varying based on credit risk, loan amount, and duration.