... to products' (Bendry, Hussey & West, 2001: 465) by the use of a common cost driver. Examples of costs pools are the power, material handling, material receipt, and production planning, sales administration, get-up cost and buying. 2.2 Cost Drivers A cost driver is any activity or series of activities, which take place within an organisation, which cause costs to be incurred. Costs drivers are not restricted to departments or sections, as more than one activity may be identified within a department. Examples of cost drivers are the 'volume of raw materials handled in the organisation, the number of orders placed by customers or the number of machine hours' (Glautier & Underdown, 2001: 468). 2.3 Understanding ABC in terms of overhead costs ABC emphasises the need to obtain a better understanding of the behaviour of overhead costs, and thus ascertains what causes overhead costs and how they relate to products. ABC recognises that in ...

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