A cost driver, also known as an activity driver, refers to a cost unit. Machine setups, maintenance requests, power consumed, purchase orders, quality inspections, and production orders are all ...

Due to this, selecting accurate cost drivers is vital to an entity's profitability as well as its operations. The relationship between direct and indirect costs should be considered when deciding ...

Since fixed costs are unrelated to a company’s production of goods or services, they are generally indirect ... the same industry. Examples of variable costs include the cost of labor, utilities ...