Answer
Cost Pool : A cost pool groups indirect costs, spanning from broad plant expenses to specific operations. It is used to allocate these costs to various cost objects.
Cost Allocation : Cost allocation is the process of distributing indirect costs to cost objects. It assigns shared expenses based on a chosen cost-allocation base, such as machine-hours or direct labor costs.
Cost-Allocation Base : A cost-allocation base links indirect costs to cost objects. It's a systematic method, like machine-hours, used to distribute costs based on a cause-and-effect or other relevant relationship.
Work Step by Step
Cost Pool : A cost pool groups indirect costs, spanning from broad plant expenses to specific operations. It is used to allocate these costs to various cost objects.
Cost Allocation : Cost allocation is the process of distributing indirect costs to cost objects. It assigns shared expenses based on a chosen cost-allocation base, such as machine-hours or direct labor costs.
Cost-Allocation Base : A cost-allocation base links indirect costs to cost objects. It's a systematic method, like machine-hours, used to distribute costs based on a cause-and-effect or other relevant relationship.
