Select the appropriate item for each of the definitions listed below.
-a factor that causes a change in cost or activity
A)relevant range
B)cost behavior
C)driver
D)variable cost
E)fixed cost

Question

Quizplus · Accepted Answer

A driver is a factor that causes a change in cost or activity. It is a variable that can be used to explain changes in costs or activities. Examples of drivers include production volume, number of units sold, number of machine hours, and so on.

Option A, relevant range, refers to a range of activity or volume where the assumptions about cost behavior are valid.

Option B, cost behavior, refers to how costs change as activity or volume changes.

Option D, variable cost, refers to a cost that varies in proportion to changes in activity or volume.

Option E, fixed cost, refers to a cost that remains constant in total, regardless of changes in activity or volume.

Select the Appropriate Item for Each of the Definitions Listed