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23 June, 08:48

Which of the following is true about cost drivers: a. Cost drivers are the same across industries b. Identifying the small cost drivers can make a big impact on bottom-line results c. Cost drivers are activities or decisions that create costs d. Quality is an overarching cost driver e. All of the above are true f. None of the above are true g. A & B only h. C & D only

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  1. 23 June, 09:07
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    h. C & D only

    That is

    c. Cost drivers are activities or decisions that create costs.

    d. Quality is an overarching cost driver.

    Explanation:

    Cost driver is defined as a factor that causes change in the cost of an activity. It is unit change of an activity that causes change in the cost of that activity.

    For example when electricity is consumed, the number of units consumed determines the cost incurred, so the units of electricity is a cost driver that influences the cost of electricity.

    Quality is considered an overarching cost driver because the higher the quality of a product the greater cost incurred to produce it.
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