What - Is Cost Drivers [extra Quality]

Measure how long an activity takes to complete (e.g., setup time vs. number of setups). 3. Structural and Executional Drivers

Cost drivers are the activities, processes, or events that trigger costs to be incurred. They can be broadly classified into two categories: structural cost drivers and executional cost drivers. Structural cost drivers are related to the organization's structure, such as its size, complexity, and technology. Executional cost drivers, on the other hand, are related to the way the organization operates, such as the efficiency of its processes and the skills of its employees. what is cost drivers

: The most basic driver; more products equals more raw materials. Measure how long an activity takes to complete (e

| Function | Cost Driver | |----------|--------------| | Manufacturing | Machine hours, direct labor hours, units produced | | Purchasing | Number of purchase orders, suppliers | | Quality control | Number of inspections, defect rate | | Distribution | Miles driven, weight shipped, number of deliveries | | Customer service | Number of calls, tickets, support hours | | IT | Number of users, servers, transactions | | HR | Number of employees, new hires, training hours | Structural and Executional Drivers Cost drivers are the