Question

LO 6.2For each cost pool, identify an appropriate cost driver.

Answer 1

Answer:

Cost driver for order department , accounts receivable processing , catering

and raw material inventory is number of orders, number of customers, number of meals and number of material requisitions received respectively.

Explanation:

A cost driver is any factor which causes a change in the cost of an activity. So number of orders, number of customers, number of meals and number of material requisitions received can causes change in total cost of order department , accounts receivable processing , catering  and raw material inventory respectively.