A cost driver is an observable factor that causes changes in total costs. Cost allocation may use the relationship between the cost driver and the cost assigned to the cost object to more accurately ascertain the total cost of the cost object. Total costs are required to determine overall profitability of products, services activities, projects and the organisational as a whole.
Unit cost is the total cost divided by the number of units produced.
Caution in using unit costs unit costs are averages total costs of cost objects include fixed and variable costs.