When managers structure activity cost pools more finely with cost drivers for each activity cost pool as the cost-allocation base,it leads to more accurate costing of activities.

Question

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By identifying specific cost drivers for each activity cost pool, managers can more accurately allocate costs to the products or services that use those activities. This can lead to more precise costing of activities and ultimately, better decision-making.

When Managers Structure Activity Cost Pools More Finely with Cost