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Cost Driver Definition

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Upgrade Now Upgrade to Premium to add all these features to your account! × Create an account to continue watching Register for a free trial Are you a student or a Wikipedia® is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. For example, does a company incur higher costs when using packing peanuts versus bubble wrap? In the past century, the root cause of indirect manufacturing costs has changed from a single cost driver (such as direct labor hours) to several cost drivers. http://asmwsoft.net/cost-driver/cost-drivers-definition.html

View PRO Features About the Author Harold Averkamp (CPA, MBA) has worked as a university accounting instructor, accountant, and consultant for more than 25 years, Read More... Read all 2,023 Testimonials About Us Home About Quick Tour Testimonials Contact Newsletter Advertise Helpful Links Sitemap Materials Quizzes Quick Tests Flashcards Crossword Puzzles Word Scrambles Bookkeeping Q&A Dictionary Visual Tutorials Back members login here × Start your FREE trial. There may be multiple cost drivers responsible for the occurrence of a single expense.

Cost Pool

All other trademarks and copyrights are the property of their respective owners. Components: A company may be incurring costs based on the components in the products it produces. Learn Math, English, Science, and History with practice tests, quizzes and personalized coaching. Maybe packing peanuts costs double the price of bubble wrap and is, therefore, the cost driver.

Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. Internal management utilizes the cost of a product in the determination of the product's price. the Old SAT GRE Writing Prompts PSAT Test Dates Create an account to start this course today Try it free for 5 days! Cost Driver Examples In Manufacturing Accounting Careers Take the Tour Free Guide toBookkeeping Concepts Receive our free 18-page Guide to Bookkeeping Concepts (PDF) when you subscribe to our free newsletter.

MIS Basics: Homework Help Go to MIS Basics: Homework Help Ch 20. Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you. Townhouse One of the biggest financial decisions people make in their lives is when they decide to become a homeowner. http://www.accountingcoach.com/blog/what-is-a-cost-driver A cost driver assists with allocation expenses in a systematic manner that theoretically results in more accurate calculations of the true costs of a producing specific products.Examples of Cost DriversThe most

Standard Costing 33. What Is A Cost Driver Quizlet You are already subscribed. Bonds Payable 21. Next: Sharing a Custom Course Share your Custom Course or assign lessons and chapters.

Types Of Cost Drivers

The correct allocation of manufacturing overhead is important for determining the true cost of a product. There are no industry standards or regulations stipulating mandating cost driver selection. Cost Pool Since preparing car bodies is a fairly labor intensive operation, an increase in wages can drastically increase the cost of the activity. List Of Cost Drivers Business Marketing Basics: Homework...

Go to Product Promotion: Homework Help Ch 19. http://asmwsoft.net/cost-driver/cost-driver-accounting-definition.html In traditional costing the cost driver to allocate indirect cost to cost objects was volume of output. By using this site, you agree to the Terms of Use and Privacy Policy. Future Value of a Single Amount 25. Cost Driver Analysis

marginal benefi... Study.com video lessons have helped over 10 million students. If a company has to pay employees or companies to handle products, like getting them ready to ship, there are also costs. navigate here References[edit] ^ "Competitive Advantage", by Michael Porter ^ Strategic Cost Management: The New Tool for Competitive Advantage by Shank and Govindarajan “Cost Accounting: a managerial emphasis”- 12a Edição (2005) by Charles

We will define the term, look at examples, and learn the steps a company might take when analyzing a cost driver. Cost Driver Rate Log in or sign up to add this lesson to a Custom Course. In this case, for each hour of direct labor required for production, the company would allocate $50 of indirect overhead costs to the production activities or output.

With the change in business structures, technology and thereby cost structures it was found that the volume of output was not the only cost driver.

Sign Up Close navigation Home Dictionary Term of Day Articles Subjects Sign Up cost driver Definition + Create New Flashcard Popular Terms A factor that can causes a change in the Browse Articles By Category Browse an area of study or degree level. Workplace Productivity & Motivation:... Cost Drivers Examples In Service Industry Use 'cost driver' in a Sentence Bill had known the true output of his machine should of been much less but was lazy and let the machine run due to the

Present Value of a Single Amount 23. The lesson will conclude with a summary and a quiz. Students in online learning conditions performed better than those receiving face-to-face instruction. http://asmwsoft.net/cost-driver/cost-driver-analysis-definition.html back Your selected plan: {{cart.product.displayName}} You are joining: {{cart.product.institutionName}} {{ cart.coupon.trialDays ?

Go to Financial Management: Homework Help Ch 24. It is determined that after every 1,000 machine hours, maintenance costing $500 is performed. Next, go to any lesson page and begin adding lessons. These costs have begun to cut into your profits, and it's time to figure out what's happening.

Go to Money and Financial Institutions: Homework Help Cost Driver in Accounting: Definition, Analysis & Example Related Study Materials Related Recently Updated Popular Browse by Courses Business Courses Study Courses Study Chart of Accounts 04. ACCESS NOW! Go to Homework Help for Social Responsibility and Ethical Behavior in Business Ch 3.

Activity Based Costing is based on the belief that activities cause costs and therefore a link should be established between activities and product. So, your business was incurring costs via returns by customers. Datar See also[edit] Activity-based costing Fixed cost Variable cost Value chain Retrieved from "https://en.wikipedia.org/w/index.php?title=Cost_driver&oldid=781162443" Categories: Management accountingCostsProduction economics Navigation menu Personal tools Not logged inTalkContributionsCreate accountLog in Namespaces Article Talk Variants asset revenue pro forma invoi...