An activity that has a direct cause-effect relationship with the resources consumed is a(n)
A) cost driver.
B) overhead rate.
C) cost pool.
D) product activity.

Question

Quizplus · Accepted Answer

A cost driver is an activity that has a direct cause-and-effect relationship with the resources consumed. It is used to allocate costs to a specific product or service based on the cost driver used to measure the activity. Therefore, option A is the correct answer. The other options are not directly related to the concept of cost driver.

An Activity That Has a Direct Cause-Effect Relationship with the Resources