COMM-2016EL Chapter Notes - Chapter 3: Industrial Engineering, Flight Controller, Systematic Review
18 Sep 2017
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Recap: cost drivers any factor that affects total cost (any change in the quantity of the cost driver will cause a change in the total cost of the object) Linear-cost behaviour activity that can be graphed with a straight line when a cost changes proportionately with changes in a cost driver. For some costs, volume of a product produced or service provided is the primary driver. These costs are easy to identify with/trace to products or services. An example includes the costs of printing labour, paper, ink, and binding to produce a textbook, the number of copies printed affects the total costs for each item. We could relatively easily trace the use of these resources to the copies of the text printed schedules, payroll records, and other documents show how much of each was used to produce the book. Other costs are more affected by activities not directly related to volume, and often have multiple cost drivers.
