Reasons for cost allocation, Cost Accounting

Reasons for Cost Allocation

1. To provide comparison along with externally provided services:  It helps in assessing where to continue the contact or service outsiders.

2. To facilitate ideas on the efficiency of service departments: It assists to determine where a service department is operating efficiently and its size is optimal.

3. To discourage unnecessary service via some managers like they identify they'll be charged.

4. To facilitate opportunity for cost price-quality tradeoffs: Cost allocation assists to remove friction among departments. Since a user department such demands higher quality recognizes that it will contain to bear higher costs.

Posted Date: 2/5/2013 7:49:21 AM | Location : United States







Related Discussions:- Reasons for cost allocation, Assignment Help, Ask Question on Reasons for cost allocation, Get Answer, Expert's Help, Reasons for cost allocation Discussions

Write discussion on Reasons for cost allocation
Your posts are moderated
Related Questions
ADVANTAGES OF STANDARD COSTING 1.     It offers a yardstick for measurement of performance. 2.     It helps 'Management by Exception'. 3.     It allows the management to

Difference between budgetary planning and budgetary control

If the net income under marginal costing is #100,000, calculate absorption costing, if opening and closing inventories are #20,000 and #15,000

1) The Svelte Jeans Company produces two different types of jeans. One is called the "Simple Life" and the other is called the "Fancy Life". The company sales budget estimates that

Overhead Costs Introduction Overhead costs may be defined like the net cost of indirect materials, indirect expenses and indirect labour. They may happen or be charged to

Relationship among management accounting and cost accounting Referring to CIMA's definition for cost accounting, we can determine cost accounting is a part of management accou

Direct Labour Efficiency Variances It is the difference between the standard hours allowed for the actual production achieved and the hours actually worked, all valued at THE

A company is evaluating the following lease or buy option.  A four year lease with annual payments of $25,000 payable at the beginning of the year. The tax shield is available a

Assume that Banc One receives a primary deposit of $1 million. The bank must keep reserves of 20 percent against its deposits. Prepare a simple balance sheet of assets and liabilit