Identifying Cost Drivers for a Service Company. McHale Architects, Inc., designs, engineers, and supervises the construction of custom homes. The following activities were identified as being most important (step 1 and step 2 of activity-based costing), and cost pools were formed for each activity:

1. Meeting with customers
2. Coordinating inspections with the building department
3. Consulting with contractors
4. Maintaining office equipment
5. Processing customer billings (invoices)