The Activity Based Costing (ABC) approach relates indirect cost to the activities that drive them to be incurred.
A factory, for example, may have running… … Investment dictionaryĬost driver - A cost driver is the unit of an activity that causes the change of an activity cost. In activity based costing (ABC), an activity cost driver is something that drives the cost of a particular activity. Activity Cost Driver - A factor that influences or contributes to the expense of certain business operations.
