5/29/2023 0 Comments Executional cost drivers examplesTo manage activities and their costs, it is necessary to understand how costs respond to cost drivers, which are the factors that cause or influence costs. Each of these is an activity, and the performance of each activity consumes resources that cost money. To serve a customer at a restaurant, for example, a waiter or waitress might perform the following units of work: seat customer and offer menu, take customer order, send order to kitchen, bring food to customer, serve and replenish beverages, determine and bring bill to customer, collect money and give change, clear and reset table. ![]() These decisions and actions-undertaken to satisfy customer demand-drives costs. To serve customers, managers and employees make a variety of decisions and take numerous actions. The reason is that its success depends on customer service – prompt response to customer requests, and prompt and accurate filling of customer orders. The example of an internet retailer such as is a good example of the type of firm that must pay close attention to executional cost drivers. Some examples of possible structural cost drivers for a retail store might be: Determining the size of stores. ![]() The cost at issue often is referred to as the cost object. Without customer demand for products or services, the organization cannot exist.Ĭost drivers are characteristics of activities or events that cause a business to incur costs. The most basic cost driver is customer demand.
0 Comments
Leave a Reply. |