All costs in a homogeneous cost pool have
A)only one cost driver that will accurately represent the relationship between the costs and the activity.
B)to be adjusted at year end to actual costs.
C)the same cost behaviour.
D)the same or a similar cause-and-effect (or benefits-received)relationship with a single cost driver that is used as the cost-allocation base.
E)a causal relationship with manufacturing costs.

Question

Quizplus · Accepted Answer

Homogeneous cost pools have costs that have a similar cause-and-effect relationship with a single cost driver that is used as the cost-allocation base. This means that all costs in the pool can be allocated using the same allocation method and cost driver.

All Costs in a Homogeneous Cost Pool Have