This is the question text for M1 overhead costs are usually assumed to be closely related to the level of direct labor hours. groups overheads by cost diver activity it often makes sense to use 1. In a labor-intensive company several different cost drivers 2. In a high-tech company should be closely related to 3. Activity-Based Costing its cost pool come from departments 4. a cost driver that are not directly associated with production. 5. a cost pool are costs such as indirect labor, indirect materials, 6. Production department overhead depreciation on equipment, supervisory wages, and so 7. Support department costs presumes that all costs are static regardless of the level of activity or production, and seeks to fairly allocate those costs