Question

What is established to collect operating expenses when two or more work centers share physical space, personnel, and supplies?

Answer 1

A cost pool is established to collect operating expenses when two or more work centers share physical space, personnel, and supplies.

Step-by-step explanation:

In situations where two or more work centers share physical space, personnel, and supplies, a common solution is to establish a cost pool. A cost pool is a grouping of costs that are incurred together and can be allocated to different departments or products based on an appropriate allocation base. For example, if two work centers share the same physical space, the rent expense can be allocated based on the square footage used by each work center.