COST DRIVER Definition

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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.

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YEAR-END ADJUSTMENT is the process of adjusting the entry to an account at the end of the calendar or fiscal year in order to properly state it for financial statement preparation purposes. The various  required adjustments include accrual or deferral of a revenue or expense item, reclassification, to conform book figures to physical inventory counts, and reflecting unusual transactions.

BREAK-EVEN ANALYSIS is an analysis method used to determine the number of jobs or products that need to be sold to reach a break-even point in a business.

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