Business Glossary

best single measure of the frequency and intensity of the demands placed on activities by intermediate and final cost objectives. It is used to reassign activity costs to cost objects. It represents a line item on the bill of activities for a product or customer. An example is the number of part numbers, which is used to measure the consumption of material-related activities by each product, material type, or component. The number of customer orders measures the consumption of order-entry activities by each customer. Sometimes an activity driver is used as an indicator of the output of an activity, such as the number of purchase orders prepared by the purchasing activity.

intermediate and final dispositions of cost pools. Intermediate cost objects receive temporary accumulations of costs as the cost pools move from their originating points to the final cost objects. Final cost objects, such as a job, product, or process, shouldbe logically linked with the cost pool based on a cause-and-effect relationship.