activity cost pool


activity cost pool
= cost pool
In activity-based costing, a collection of indirect costs grouped according to the activity involved. To identify the costs of each activity, cost pool managers will have to ask questions such as:
• What staff are involved with the activity?
• What machinery, equipment, vehicles, and computers are used by staff?
• What materials are used for the activity? Each activity cost pool has one or more relevant activity measures (or cost drivers) that are used in allocating costs: for some common examples, see the table on p. 13. The size of a particular cost pool will vary widely from one organization to another. For example, a cost pool for order processing may include hundreds of staff in a large organization, whereas a smaller organization may not have a separate cost pool for this activity as it involves only one or two staff. Note that some costs may not be included in any activity cost pool, usually because they are too minor or too difficult to allocate in this way.

Big dictionary of business and management. 2014.

Look at other dictionaries:

  • activity cost pool — cost pool In activity based costing, a collection of indirect costs grouped according to the activity involved. To identify the costs of each activity, cost pool managers will have to ask such questions as: • What staff are involved with the… …   Accounting dictionary

  • Activity Cost Pool — In managerial accounting, a set of costs which are incurred when certain operations are performed within the organization. By accounting for all of the costs incurred in a specific activity with a pool, it is simpler to assign those costs to… …   Investment dictionary

  • cost pool — See: activity cost pool …   Accounting dictionary

  • cost pool — Fin the point of focus for the costs relating to a particular activity in an activitybased costing system …   The ultimate business dictionary

  • activity measure — In activity based costing systems, a measure of the volume or rate of activity in an activity cost pool used as a basis for allocating costs. Ideally, the activity measure chosen will be such that any rise or fall in the measure correlates… …   Accounting dictionary

  • activity measure — In activity based costing systems, a measure of the volume or rate of activity in an activity cost pool used as a basis for allocating costs. Ideally, the activity measure chosen will be such that any rise or fall in the measure correlates… …   Big dictionary of business and management

  • cost driver — In a system of activity based costing, any factor such as number of units, number of transactions, or duration of transactions that drives the costs arising from a particular activity. When such factors can be clearly identified and measured,… …   Accounting dictionary

  • cost driver — In a system of activity based costing, any factor such as number of units, number of transactions, or duration of transactions that drives the costs arising from a particular activity When such factors can be clearly identified and measured, they …   Big dictionary of business and management

  • Activity Center — A pool of activity costs associated with particular processes and used in activity based costing (ABC) systems. Each activity center is separately identified and can be assigned to specific cost drivers. In this manner, a large overhead cost pool …   Investment dictionary

  • Cost of goods sold — Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management · Chart of accounts  …   Wikipedia


Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.