Which is the best definition of a cost driver?
A cost driver is an activity that is the root cause of why a cost occurs. It must be applicable and relevant to the event that is incurring a cost. There may be multiple cost drivers responsible for the occurrence of a single expense.
What should I look for when buying an SUV?
As shoppers narrow down their options, cost consideration comes into play. Stacy explored pricing and payment options that were right for her, including: price points less than $30,000, comparisons of leasing vs. buying, lease exchange programs, and the trade-in value of her current SUV.
What do you mean by activity cost driver?
Updated Mar 29, 2019. An activity cost driver is an accounting term. A cost driver affects the expenses of certain business operations. In activity-based costing (ABC), an activity cost driver influences the costs of labor, maintenance, or other variable costs.
How are cost drivers selected for overhead allocation?
Management selects cost drivers as the basis for manufacturing overhead allocation. There are no industry standards or regulations stipulating or mandating cost driver selection. Company management selects cost drivers based on the variables of the expenses incurred during production.
What do you mean by cost of funds when buying a car?
Also known as a “walk-away lease.” Cost of Funds: An APR, a money factor, or a rent charge, this is the charge for using the bank’s—or another lender’s—money to acquire the car. Also known as financing costs. Dealer Holdback: A small percentage of a vehicle’s cost that a manufacturer pays back to a dealership after the vehicle has been sold.
How can you tell the price of a car from the dealer?
The dealer may even reveal a dealer document sent by the manufacturer that shows the invoice price, the price the dealer allegedly paid to purchase that car. Sounds good except the invoice doesn’t necessarily reflect the actual price the dealer paid to purchase the car from the manufacturer.
Which is the best definition of an investment vehicle?
Investment vehicle refers to any method by which individuals or businesses can invest and, ideally, grow their money. There is a wide variety of investment vehicles, and many investors choose to hold at least several types in their portfolios. This can allow for diversification while minimizing risk.
What does it mean when a dealer holds back a car?
Also known as financing costs. Dealer Holdback: A small percentage of a vehicle’s cost that a manufacturer pays back to a dealership after the vehicle has been sold. This is what allows dealerships to sell vehicles at invoice price or below and still make a profit.