1. Aztec Builders allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:

Direct materials used	$24,000
Direct labour costs	$62,000
Salary of factory supervisor	$49,000
Advertising expense	$33,000
Heating and lighting costs for factory	$21,000
Depreciation on factory equipment	$10,000
Sales commissions	$8,000

3. In an activity-cost pool
   1. a measure of the activity performed serves as the cost allocation base.
   2. the costs have a cause-and-effect relationship with the cost-allocation base for that activity.
   3. the cost pools are homogeneous over time.
   4. costs in a cost pool can always be traced directly to products.
   5. each pool pertains to a narrow and focused set of costs.