An activity cost driver is:
A)a measure of the underlying activity that occurs in each activity cost pool.
B)a measure of the volume of units produced or customers sold.
C)a number of activities combined into one cost pool.
D)the cost assigned to an activity.

Question

Quizplus · Accepted Answer

An activity cost driver is a measure of the underlying activity that occurs in each activity cost pool. It is used to allocate costs to cost objects based on the level of activity associated with each object. For example, the number of machine hours used in a production process may be a cost driver for overhead costs associated with that production process.

An Activity Cost Driver Is