So simply speaking a cost driver is anything that drives the

So simply speaking, a cost driver is anything that drives the cost related to a cost object or an activity.
We will talk more about cost drivers again when we discuss activity-based costing next week. Until then, let\'s quickly review some examples of cost drivers below.
What will be some cost drivers that drive the following costs?

*Research and development cost

*Marketing cost

Solution

Research and development cost: This cost is depends on activity of research hence cost driver for this activity is Number of research Projects

Marketing cost: this activity can be depends on demand creation/ advertising/ dispatch hence for this const driver can be increase in sale /increase in sale / number of orders respectively.