A cost driver: • Is any factor whose change causes a change in the total cost of a related cost object. Best adobe acrobat x pro crack amtlib dll 2016 free software windows 10. Hence a change in the level of cost driver will cause a change in the level of the total cost of a related cost object. Examples of cost driver used in the following business units: • Research & Development:- Number of research projects, technical complexities of the projects • Design of products, services & process:- number of products in design, number of parts per product, • Marketing:- number of advertisement run, number of sales personnel, sales revenue • Distribution:-number of items distributed, number of customers, weight of items distributed • Customer services:-numbers of service calls, hours spent in servicing of products.

All these activities will become cost drivers. Examples of these cost drivers are given below: 1st: No. Of Purchase Orders When we have to make any product, we issue the order. This is a simple activity. Its cost can be calculated one the basis of no. Of purchase orders. So, number of purchase order is an example of cost driver. The textbook answer defines cost drivers as those factors that determine the overall cost of operations. As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product. In service, the cost drivers could be the actual ratio of billable to non-billable time.