The total cost (TC)of an item is calculated as TC = F + VX.Which is the cost driver rate?
A)TC
B)F
C)V
D)X

Question

Quizplus · Accepted Answer

In the equation TC = F + VX, V is the cost driver rate because it measures the amount of the cost driver (such as labor hours, machine hours, or units produced) that is used to determine the total cost. F represents the fixed costs and X represents the amount of the cost driver that is incurred. However, neither of these are the cost driver rate.

The Total Cost (TC)of an Item Is Calculated as TC