7 IN ACTIVITY-BASED COSTING, COSTS MUST FIRST BE ALLOCATED TO ACTIVI...

8-7 In activity-based costing, costs must first

be allocated to activity cost pools and then are

tivities have unusually large costs. If some other

allocated from the activity cost pools to products,

organization is able to carry out the activity at a

significantly lower cost, it is reasonable to sup-

customers, and other cost objects.

pose that improvement may be possible.