Resource and cost driver

hi,
1) may i know what is resource driver and cost driver?
2) what is the purpose for both?
thanks

Hi,
Cost Drivers(Statistical Key Figures in SAP) and Resource drivers(Activity in SAP) are activities which causes costs. In traditional Cost Accounting, for example the maintenance costs are allocated on the basis of machine hours or asset value whichever is convenient. But recently, some Management Accounting Expert like Robert Kaplan found these cost drivers are giving inaccurate pricing and costing. Hence, they propounded ABC-Activity Based Costing, wherein they brought in more accurate Cost Drivers with the help of effect and cause relationships to assign costs objectively.
Trust this helps much!
Cheers!

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