| Cost Pool | Amount | Cost Driver | Driver Quantity | Rate | | --- | --- | --- | --- | --- | | Machine setup | $200k | Number of setups | 200 setups | $1,000/setup | | Quality control | $150k | Inspection hours | 3,000 hours | $50/hour | | Materials handling | $150k | Number of material moves | 500 moves | $300/move |
In cost accounting, every product, service, or business activity incurs costs. But what causes those costs to change? The answer is the cost driver . what is cost driver in cost accounting
In cost accounting, if you cannot name the cost driver, you do not truly understand the cost. Identify the right drivers, and you gain control over pricing, profitability, and operational efficiency. | Cost Pool | Amount | Cost Driver