What is a Secondary Cost Pool?

A secondary cost pool accumulates those costs incurred to provide services to other parts of the company. There may be several secondary cost pools, depending upon the nature of the costs and how they will be allocated. Examples of secondary cost pools are facility services, copy services, legal services, motor pool services, and data processing services.

These costs are later allocated to primary cost pools that more directly relate to products and services. For example, if there is a large cost associated with computer services, these costs are stored separately in a data processing services cost pool and allocated based on computer usage. If there is another cost pool that contains building costs, these costs are stored separately in a facility services cost pool and allocated based on square footage used.