Models of past cost behaviour are called cost functions. Factors that influence costs are called cost drivers (Horngren, Datar, and Rajan, Cost Accounting, 2018). Assume the cost data shown below are from a rug manufacturer. Indirect manufacturing labour costs consist of machine maintenance costs and setup labour costs. Machine-hours and direct manufacturing labour-hours are cost drivers.

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Indirect Week Manufacturing Machine- Direct Manufacturing Hours Labour Costs Labour-Hours 1 $1,190 2 1,211 3 1,004 4 917 8882 68 30 35 62 36 72 20 5 770 60 47 6 1,456 96 45 7 1,180 78 44 8 710 46 38 9 1,316 82 70 10 1,032 94 30 11 752 68 29 12 963 48 38 Indirect Week Manufacturing Machine- Direct Manufacturing Hours Labour Costs Labour-Hours 1 $1,190 2 1,211 3 1,004 4 917 8882 68 30 35 62 36 72 20 5 770 60 47 6 1,456 96 45 7 1,180 78 44 8 710 46 38 9 1,316 82 70 10 1,032 94 30 11 752 68 29 12 963 48 38

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