a factor that determines the cost of an activity. Cost drivers are analyzed as part of activity based costing and can be used in continuous improvement programs. They are usually assessed together as multiple drivers rather than singly. There are two main types of cost driver: the first is a resource driver, which refers to the contribution of the quantity of resources used to the cost of an activity; the second is an activity driver, which refers to the costs incurred by the activities required to complete a particular task or project.
allocation rate=cost pool amount/ cost driver volume
no
Cost objectives determines the cost allocation. It determines the product, service or department that will receive the allocation.
Yes, it is. When used for allocating costs, a cost driver is often called a cost-allocation base
allocate cost arbitrarily
Cost allocation allows a company to determine the amount each item produced will cost. An effective cost allocation will be able to track down the shared costs of production not only to the divisions but also to the products and customers that use those costs.
The following are the differences between allocation and apportionment. 1. Allocation costs are directly allocated to cost centre. Overhead which cannot be directly allocated are apportioned on some suitable basis. 2. Allocation allots whole amount of cost to cost centre or cost unit where as apportionment allots part of cost to cost centre or cost unit. 3. No basis required for allocation. Apportionment is made on the basis of area, assets value, number of workers etc.
Cost allocation...
Simply: allocation of cost to a cost centrehttp://www.answers.com/topic/cost-absorption:Allocation of cost to a product, process, or department using a rational allocation basis. For example, rent expense can be allocated to a department based on square footage.
How the opportunity cost can be applied to the production process for the allocation of resources. How the opportunity cost can be applied to the production process for the allocation of resources.
cost allocation
Depreciation.