driver Analysis: Defining Root Causes
Managing activities requires an understanding of what factors cause activities to be performed and what causes activity costs to change. Activities consume inputs (resources)and produce outpput.For example, if the activity is maintaining the payroll master file, the resources used would be such things as a payroll clerk, a computer, a printer, computer paper, and disks. The output would be an updated employee file. An activity output measure is the number of times the activity performed. It is the quantifiable measure of the output. For example, the number of employee files maintained is a possible output measure for maintaining the payroll master file