Weighted Cost Driver

Weighted Cost Driver

In accounting, the process of treating some cost drivers (that is, factors that directly contribute to overhead such as labor and machines used) as affecting overhead more or less than they actually do.
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These weights are multiplied by each participating jurisdiction's percentage of the total for the cost driver and summed to arrive at a weighted cost driver. For example, jurisdiction A's percentage of the total property value for all participating jurisdictions is multiplied by .25.
Next, the total cost for each of the four cost pools was determined by multiplying the cost-per-activity unit by each activity's weighted cost driver volume.
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