Cost driver categories

 · Types Of Cost Drivers. You can also use driver attributes for modeling purposes to group drivers that are modeled the same way. An example of a strategic management decision is the selection of the product mix that maximizes profits. In some accounting systems, cost drivers are almost irrelevant in determining the contribution.  · Examples of cost drivers are direct labor hours worked, the number of customer contacts made, the number of engineering change orders issued, the number of machine hours used, and the number of product returns from www.doorway.ruted Reading Time: 30 secs. Decisions that affect organizational cost drivers are made within the context of previous decisions affecting structural cost drivers. The types of activities and the costs of activities performed to satisfy customer needs are influenced by an organization’s size, its location, the scope of its operations, and the technologies used.

The cost driver is that variable or factor which has an effect and causes the relationship with the total cost. This is the cause, and the cost incurred is the effect of it. Its analysis means identifying all the possible cost drivers for a particular type of activity or cost etc. and explains their cause and effect relationship with the event. “Cost drivers are the structural determinants of the cost of an activity, reflecting any linkages or interrelationships that affect it”. Driver Categories. Organizational Cost Drivers – Choices concerning the organization of activities and the involvement of persons inside and outside the organization in decision making. Activity Cost Driver and ABC Costing; Examples of Types of Cost Drivers; Cost Driver Analysis; Advantage of Cost Drivers; Value Driver and Cost Drivers.

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