Question

Lookin' for a Home is an animal shelter in Omaha, Nebraska. The shelter relies on government grants and private donations for funding. It takes in homeless dogs and cats and keeps them until they are adopted by qualified individuals. One of the shelter's cost pools is animal recordkeeping, which involves maintaining a database with details about each animal in the shelter. Which of the following is the most appropriate cost driver for the animal recordkeeping cost pool? O A. Square feet allocated to the recordkeeping operation B. Number of employees who O C. Number of animal intake and adoption transactions 0 D. Number of government grants sought

Answer 1

A cost driver refers to a unit of an activity that causes a change in the cost of an activity or it refers to a factor that causes a change in the cost of an activity.

In the given problem the number of animal intake will change the overall cost incurred on the animals that are kept in the shelter, and as animal record keeping cost pool manages the data related to each animal in the shelter, so the number of animal intake and total number of adoption transactions would be a suitable cost driver for the animal record keeping cost pool.