In an Activity-Based Costing (ABC)system,a cause-and-effect relationship is known as a
A)cost stimulator.
B)overhead stimulator.
C)cost driver.
D)cost catalyst.

Question

Quizplus · Accepted Answer

A cause-and-effect relationship in ABC is known as a cost driver, as it is the activity or factor that directly causes a change in the cost incurred. It helps allocate overhead costs more accurately to products or services based on their actual usage of resources. A cost stimulator or catalyst would not accurately reflect the concept of a cause-and-effect relationship in ABC.

In an Activity-Based Costing (ABC)system,a Cause-And-Effect Relationship Is Known as a