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Investments glossary

Activity Cost Driver


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Quotes of the day:

Doctors pour drugs of which they know little, to cure diseases of which they know less, into patients of whom they know nothing.

— Moliere

An activity cost driver is an accounting term. A cost driver affects the cost of specific business activities. In activity-based costing (ABC), an activity cost driver influences the costs of labor, maintenance, or other variable costs. Cost drivers are essential in ABC, a branch of managerial accounting that allocates the indirect costs, or overheads, of an activity.

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