Difference between revisions of "Homogeneous Cost Pool"
From Knowledge base
(Created page with "==Homogenous Cost Pool== An indirect cost pool is homogeneous if each significant activity whose costs are included therein has the same or a similiar beneficial or causal rel...") |
(→Homogenous Cost Pool) |
||
Line 1: | Line 1: | ||
==Homogenous Cost Pool== | ==Homogenous Cost Pool== | ||
− | An indirect cost pool is homogeneous if each significant activity whose costs are included therein has the same or a | + | An indirect cost pool is homogeneous if each significant activity whose costs are included therein has the same or a similar beneficial or causal relationship to cost objectives as the other activities whose costs are included in the cost pool. It is also homogeneous if the allocation of the costs of the activities included in the cost pool result in an allocation to cost objectives which is not materially different from the allocation that would result if the costs of the activities were allocated separately. |
==CASES== | ==CASES== |
Latest revision as of 14:18, 28 September 2020
Contents |
Homogenous Cost Pool
An indirect cost pool is homogeneous if each significant activity whose costs are included therein has the same or a similar beneficial or causal relationship to cost objectives as the other activities whose costs are included in the cost pool. It is also homogeneous if the allocation of the costs of the activities included in the cost pool result in an allocation to cost objectives which is not materially different from the allocation that would result if the costs of the activities were allocated separately.
CASES
AM General LLC, ASBCA Nos. 53610, 54741, February 2, 2006
Allocation of Manufacturing Overhead
- AMG used a single manufacturing OH pool for military HUMMWV's and Commercial Hummers
- Hummer finishing work performed in a seperate building.
- The government found, and the ASBCA agreed that AMG's single pool was not homogenouos under CAS 418 - Allocation of direct and indirect costs
- 3 OH pools required by government, commmerical, military, common.