COST DRIVER Definition

Bookmark and Share

COST DRIVER is any activity or series of activities that takes place within an organization and causes costs to be incurred. Cost drivers are used in a system of activity-based costing to charge costs to products or services. Cost drivers are applied to cost pools, which relate to common activities. Cost drivers are not restricted to departments or sections, as more than one activity may be identified within a department.

Learn new Accounting Terms

MONEY MARKET CERTIFICATE is a security issued by com­mercial banks and savings and loan associations. Money market certificates pay a yield often based on the going Treasury bill rate. Interest rates on certificates normally remain fixed over their maturity and investors face an interest penalty for early withdrawal.

MANAGEMENT BUY-OUT is the purchase of a company by its management; usually with the backing of outside investors.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.