Questions:
1. Respond to the following statement: The allocation base chosen is unimportant. What is important in product costing is that overhead costs be assigned to production in a specific period by an allocation process."
2. Larry Kwang insists that the costs of his school's fundraising project should be determined after the project is complete. He argues that only after the project is complete can its costs be determined accurately and that it is a waste of time to try to estimate future costs. Georgia Sundum counters that waiting until the project is complete will not provide timely information for planning expenditures. How would you arbitrate this discussion? Explain the trade-offs between accuracy and timeliness.
3. Define the term cost pool. How are cost pools important in allocating costs?