Activity Cost Pool


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 products and get an accurate estimate of production costs. Activity cost pool is an aggregate of all the costs required to perform a task such as production.

The best example of where activity costs are tracked and studied is in manufacturing. Given a plant which produces many different products, financial managers are tasked with the problem of how to accurately assign production costs to each product. Using activity-based costing is a popular method for assigning costs since it is a good compromise between efficiency and accuracy. Assigning costs accurately is important to determine the profitability of products and subsequently, to make rational production decisions.


Investment dictionary. . 2012.

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 — 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… …   Big dictionary of business and management

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

  • Nord Pool — Infobox Exchange name = Nord Pool group nativename = type = Physical and financial commodity exchange city = Oslo country = Norway coor = founded = 1996 owner = Statnett (20%) Svenska Kraftnät (20%) Fingrid (20%) Energinet.dk (20%) Nord Pool ASA… …   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.