To manage them effectively, accountants often categorize drivers into four main types:

A is a factor or variable that has a direct cause-and-effect relationship with the total cost of an activity or product. When the level of a cost driver changes, it triggers a corresponding change in the total cost incurred. 1. Core Concept

In the world of business, accounting, and management, simply knowing something costs is not enough. To truly control expenses and improve profitability, you must understand why it costs that much.