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Ordering materials, setting up machines, assembling products, and inspecting products are examples of overhead cost pools
What is overhead cost pools?
Instead of dividing the overhead costs evenly among all departments, activity-based costing uses cost pools to precisely track where the money is spent.
Cost pools are a type of group of accounts used in accounting to represent the cost of goods and services that can be allocated within a manufacturing or business organization.
What is inspecting products?
Product inspection is the process of ensuring that things meet your specifications and expectations. The product inspection process is often carried out at the manufacturing facility where your product is made, and it largely focuses on examining the product's design, construction, and fundamental functionality.
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