Question

What resource driver would you use to allocate occupancy cost to activities, and how much would you allocate to Inspect

Answer 1

Cost drivers of occupancy cost:

Useful Life of Asset

Location of the asset

Lease terms

Step-by-step explanation:

Cost drivers are the factors that drives the cost. Occupancy cost is the whole life cost of the asset. It is associated with the asset during its life irrespective of asset's performance. These costs include, property taxes, insurance, inspection costs, repairs and maintenance costs and likewise. These cost are allocated to the assets useful life. Some companies also use different cost drivers like location of the asset and its lease terms. These costs are charged as the part of assets cost.