Question: 1. What is a cost driver?
2. When activity-based costing is used rather than traditional allocation methods,
(a) managers must identify cost drivers for various items of overhead cost,
(b) individual cost items in service departments are allocated directly to products or services,
(c) managers can direct their attention to the activities that drive overhead cost, or
(d ) all of the above.
3. What is the difference between a departmental accounting system and a responsibility accounting system?