Cost pool

A cost pool is a grouping of individual costs, typically by department or service center. Cost allocations are then made from a cost pool. For example, the cost of the maintenance department is accumulated in a cost pool and then allocated to those departments using its services.

Cost pools are commonly used for the allocation of production overhead to units of production, as required by several accounting frameworks. They are also used in activity-based costing to allocate costs to activities.

Related Courses

Accounting for Inventory 
Cost Accounting Fundamentals