Cost Drivers

User Generated

NXI095814

Business Finance

Description

Remember, the information you gather in this assignment will contribute to your final project due in Module 5.

This module you are learning about cost drivers. You will be adding costs to your budget. You want to consider several types of expenses.

  • What materials and labor will be necessary to produce your product for sale?
  • What overhead costs will be necessary?

Based on your estimates, continue your table started in your Module 2 discussion. Add a section for direct materials’ costs, direct labor costs, and overhead costs. At this point, you are only considering costs directly required to produce your product or service. You are not considering indirect costs, such as office rent and advertising expenses. Make sure you describe how you are determining each amount. For instance, with labor, how many employees do you anticipate needing and what will you be paying each employee? For materials, what materials are necessary, how much of each material will be needed, and what will the cost be? Once you have completed this section of your budget, your table should reflect the sales dollars anticipated and the direct costs necessary to earn those sales. At this point in the budget process, you are now able to add the projected gross profit to your budget (sales – cost of goods sold). Include your table as an attachment to your initial discussion response.

Be sure to cite any sources using APA style

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Explanation & Answer

Buddy, attached is a solution to the above assignment. Please go through it
and in case of anything, do not hesitate to contact me. I will be glad
to hear from you. Thank you

Running Head: COST DRIVERS

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COST DRIVERS

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Cost Drivers
A cost driver can be defined as any factor that has the potential to influence expenses
of some operations in a business. Activity cost driver can be applied in activity-based costing
when determining overhead causes, which in turn can be used to reduce overhead costs.
Examples of...


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