A firm that discovers factors that contribute to higher dist

A firm that discovers factors that contribute to higher distribution costs for itself than its competitors incur has identified a cost driver.

true or false

Solution

True, if a firm that discovers factors that contribute to higher distribution costs for itself than its competitors incur has identified a cost driver.

This is because the firm can use the distribution costs as a cost driver where controlling the cost can reduce the total cost of sales or uncontrolled higher distribution costs could increase the cost of sales. Also, as definition of \"Cost Driver\" says \" a cost driver is a factor which causes a change in the cost of an activity\". Thus, the distribution costs, being a significant costs, can cause a change in the overall cost of sales.