Question

In an activity-based costing system, overhead costs are divided into separate:

A. Cost objects.
B. Activity cost pools.
C. Resource consumption and activity consumption cost drivers.
D. Product-line cost pools.
E. Plantwide or departmental cost pools.

Answer 1

In an activity-based costing system, overhead costs are divided into separate activity cost pools.

Step-by-step explanation:

In an activity-based costing system, overhead costs are divided into separate activity cost pools.

B. Activity cost pools.

Activity cost pools are groupings of costs that are associated with specific activities in the production process. They allow for the allocation of overhead costs to specific activities, rather than spreading them evenly across all products or departments.