Cost Driver Analysis Example Instant

| Activity Driver | Standard Chairs | Custom Tables | Total | |----------------|----------------|---------------|-------| | Machine hours | 40,000 | 10,000 | 50,000 | | Number of setups | 200 | 1,000 | 1,200 | | Number of inspections | 500 | 2,000 | 2,500 | | Number of moves | 5,000 | 10,000 | 15,000 |

= $500,000 / 2,500 inspections = $200 per inspection cost driver analysis example

These costs are traced directly using actual resource consumption records (e.g., maintenance logs, payroll records for setup workers, move tickets). We now select drivers that link each activity’s cost to the two product lines. | Activity Driver | Standard Chairs | Custom

= $1,000,000 / 50,000 machine hours = $20 per machine hour 000 | 10