What Is a Cost Driver

question 91

Multiple Choice

What is a cost driver?

• A) It is the largest single category of cost in a company.
• B) It is a fixed cost that cannot be avoided.
• C) It is a factor that causes variations in a cost.
• D) It is an indirect cost that is essential to the business.

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction.

Managerial Accounting

The practice of identifying, measuring, analyzing, interpreting, and communicating financial information to managers for the pursuit of an organization's goals.

Primary Goal

The main objective or purpose that an organization, individual, or project aims to achieve.

Managerial Accounting

The practice of analyzing, interpreting, and presenting financial information to management for the purpose of informed decision-making.