Homogeneous cost pool
A homogeneous cost pool groups overheads sharing a single causal link with one cost driver; pooling only costs driven by the same activity prevents the distortion that occurs when unrelated overheads are blended into one broad pool.
FrameworkActivity-based costing
See it move
A factory keeps two homogeneous pools. Pool one holds machine depreciation, electricity and maintenance, all driven by machine hours. Pool two holds procurement staff salaries, invoice processing and purchase-order administration, all driven by the number of purchase orders. Mixing the two into one broad pool spread on direct-labour hours would sever the causal link each cost actually has to its driver.
Check yourself
A factory's ABC design team proposes keeping machine maintenance costs and procurement staff salaries in separate activity pools. Which statement best justifies maintaining these as two distinct pools?