Activity Cost Pools Are Not a Necessary Part of the Allocation

question 20

True/False

Activity cost pools are not a necessary part of the allocation of overhead costs using activity-based costing.

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Definitions:

Produced Units

The quantity of goods or services produced by a company during a given period, reflecting its production output.

Product Costs

Costs that are capitalized as inventory because they are directly associated with bringing goods to their present location and condition for sale.

Incurred Costs

Expenses that a company has recognized or experienced, usually relating to the goods or services it has consumed or utilized.

Direct Costs

Costs that can be directly traced to the production of specific goods or services, such as raw materials and labor directly involved in manufacturing.