It is not necessary for a cost driver to be closely related to the cost pool under Activity-Based Costing: the nature of the costing system permits the use of any driver, as long as it is consistently applied.

Question

Quizplus · Accepted Answer

The work performed in each department must be uniform, but individual products may pass through different departments. (see Exhibit 4-6 on p. 121) "It is critical that the activity measure used has a logical causal relationship to the costs in the pool…"

It Is Not Necessary for a Cost Driver to Be