A cost driver is
A)any factor or activity that has a direct cause-effect relationship with the resources consumed.
B)always based on time consumed by the activity.
C)another name for cost pool.
D)a term used only in traditional costing systems.

Question

Quizplus · Accepted Answer

A cost driver is any factor or activity that has a direct cause-effect relationship with the resources consumed. It is not necessarily based on time consumed by the activity, nor is it another name for cost pool. While it is commonly used in traditional costing systems, it is also used in more modern approaches such as activity-based costing.

A Cost Driver Is