Cost Allocation and Activity-Based Costing Systems

5 cost Allocation andActivity-Based CostingSystemsCost Allocation andActivity-Based CostingSystemsLEARNING OBJECTIVESA fter studying this chapter, you will be able the major purposes for allocating the relationship between activities, resources, costs, and cost recommended guidelines to charge the variable and fixed costs of servicedepartments to other organizational Identify methods for allocating the central costs of an the direct, step-down, and reciprocal Allocation methods to allocate servicedepartment costs to user Describe the general approach to allocating costs to products or Use the physical units and relative-sales-value methods to allocate joint costs to Activity-Based Costing to allocate costs to products or the steps involved in the design and implementation of Activity-Based Costing Activity-Based costs for cost why Activity-Based Costing Systems are being how just-in-time Systems can reduce non-value-added activitiesChapter 5 cost Allocation and Activity-Based Costing Systems179A university s computer is used for teaching and for government-fundedresearch.

Cost allocation is at the heart of most cost accounting systems. The first part of this chapter describes general approaches to cost allocation. Although we present some factors to consider in selecting cost-allocation methods, there are no easy answers. Recent attempts to improve cost-allocation methods

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  Cost, Allocation, Cost allocation

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