In an activity-based cost system, what types of drivers are used to describe cost behaviour?
A)activity drivers
B)production or unit-level drivers
C)nonunit-level drivers
D)both production (or unit-level) and nonunit-level drivers

Question

Quizplus · Accepted Answer

In an activity-based cost system, both production (or unit-level) and nonunit-level drivers are used to describe cost behaviour. Unit-level drivers are those that vary directly with the volume of production, such as direct materials and direct labor, while nonunit-level drivers are those that do not vary directly with production volume, such as setup costs, inspection costs, and machine maintenance costs. Activity drivers are used to measure the consumption of resources by activities, but they are not used to describe cost behavior.

In an Activity-Based Cost System, What Types of Drivers Are