Types of Activity Measures &Activity Cost Pool And Corresponding Activity Measures

In an Activity-based costing system(ABC),the term allocation base is replaced by the term activity measure,and the term cost driver is also used.

The two types of activity measures are:

Transaction driver – a simple count of the number of times that an activity occurs. This is the least accurate type of activity measure.

Duration driver – measures the amount of time needed to perform an
activity. This is more accurate than a transaction driver,but it takes more effort to record.

The following are the examples of activity cost pools and corresponding activity measures:

	Activity Cost Pool	Definition	Activity Measures
1	Customer order	Assign all costs of resources that are consumed by taking and processing customer orders	Number of customer orders
2	Product Designs	Assign all costs of resources consumed by designing products	Number of product design
3	Order Size	Assign all costs of resources consumed as a consequence of the number of units product	Machine-hours
4	Customer Relations	Assign all costs associated with maintaining relations with customers	No of active customers

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