6: Activity-Based, Variable, and Absorption Costing
- Page ID
- 5219
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- 6.2: Describe and Identify Cost Drivers
- the most common bases for predetermined overhead are direct labor hours, direct labor dollars, or machine hours. Each of these costs is considered a cost driver because of the causal relationship between the base and the related costs: As the cost driver’s usage increases, the cost of overhead increases as well.