Cost pool

Cost pools is an accounting term that refers to groups of accounts serving to express the cost of goods and service allocatable within a business or manufacturing organization. The principle behind the pool is to correlate direct and indirect costs with a specified cost driver, so to find out the total sum of expenses related to the manufacture of a product.

While the exact construction cost pools differs, most companies choose to form numerical based sequences that can then be allocated to the desired project. More frequently, a single cost pool will have up to ten digits in the sequence, with certain groups of those digits used to relate back to the project or something else. Cost pool accounts consists of ten digits. The first three digits of the cost pool categorize a particular branches, the next three assign the project itown, and the final four digits assign a specific sub-group of expenses of the project, such as clerical costs. Cost pools consists of overhead costs administrative costs.