A cost driver is:

A) a collection of cost pools.
B) a cost-allocation base chosen arbitrarily.
C) any factor that caused costs to be incurred.
D) costs that behave in a similar manner.

Cost Driver

A factor that influences or contributes to the expense of certain business operations.

Cost Pools

Groups of individual costs that are combined to allocate to cost objects, making the allocation process simpler and more standardized.

Cost Allocation

The process of distributing costs across various departments, products, or services within an organization to reflect the true expenses associated with each.