How many cost pools should a company use when allocating costs to divisions, channels and customers? (Select all that apply.)

A.

When allocating costs to divisions, channels, and customers, companies must construct cost pools that are, to the extent possible, homogeneous, so that all costs in the cost pool have the same or a similar cause-and-effect or benefits-received relationship with the cost-allocation base.

B.

If each cost category has a cause-and-effect or benefits-received relationship with a different cost-allocation base, the company should maintain separate cost pools for each of these costs. Determining homogeneous cost pools requires judgment and should be revisited on a regular basis.

C.

When allocating corporate costs to divisions, a company can combine corporate advertising costs and corporate administration costs into a single cost pool if both cost categories have the same or similar cause-and-effect relationship with the same cost-allocation base. Determining homogeneous cost pools requires judgment and can not be changed in the future.

D.

If each cost category has a cause-and-effect or benefits-received relationship with a different cost-allocation base, the company should maintain separate cost pools for each of these costs. Determining homogeneous cost pools requires following the accounting standards and should be revisited on a regular basis.

E.

None of the above.