A factor that causes the cost of an activity to go up or down is a(n):
A) Contribution factor.
B) Cost driver.
C) Direct factor.
D) Indirect factor.
E) Product cost.

Question

Quizplus · Accepted Answer

A cost driver is a factor that causes the cost of an activity to go up or down. It helps to identify the underlying reasons for changes in cost and is used in activity-based costing to allocate costs to products or services. The other options are not related to this concept.

A Factor That Causes the Cost of an Activity to Go