In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through

A. price index

B. cost index

C. profit index

D. cost driver index

Answer: Option A

Solution(By Examveda Team)

In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. A price index is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.