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An audit might point out that the fixed costs associated exclusively with one division might be properly noted in that division's accounts.
For example, if the corporation made automobile axles and artisan bread, for example, the fixed costs associated with bread-making would require significant explanation of they appeared on the financial reports for axles. However, creative accounting can work miracles.
The crux of your question might be 'reallocation'. Your corporate ethics officer can answer your question specifically.
And often, ethics and the law are not the same.
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Why do companies allocate cost?
Companies allocate costs so that all elements that are part of that cost share the incurred costs. It is like spreading the costs amongst those that use it. Companies allocate costs merely to assign responsibility of those costs to either several departments within that company or to just one department. For example, think of a multi-divisional business that has to provide a security service to protect its building, all divisions in that business will share the costs of the security service.
Are selling costs variable costs?
If selling costs varies with production level then selling costs are variable costs but if they remain fix then these are fixed costs.
What is the difference between actual costs and budgeted costs?
Actual Costs are costs which have occurred and can be reliably measured. Budgeted Costs are costs which have been estimated, possibly by using Forecasted Costs.
Variable costs are relevant and fixed costs are irrelevant?
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
Is fixed costs is a period costs?
Yes normally fixed costs are period costs because these costs have to be paid no matter production done or not.
What is unethical competition?
Unethical competition is trying to beat the competition by using immoral means. An example is employing slave labor in order to cut production costs.
What is better for the economy low inflation or high inflation?
Generally, low inflation is better for society because inflation has costs associated with the reallocation of assets and their value (that is, it costs money for people to change their decisions when inflation changes the value of their goods/services).
How would you describe fully absorbed costs?
Fully absorbed costs refer to costs where the firm has allocated fixed manufacturing costs to products produced or divisions within the firm as required by generally accepted accounting principles.
What is the cost per sq ft drywall labor?
Drywall labour costs depend largely on where you do them. Labour costs across North America differ locally.
Why do service delivery costs vary across municipalities?
Because you are super super gay!!
How much is the cost to hang-finish and sand commercial drywall?
Drywall labour costs depend largely on where you do them. Labour costs across north America differ locally.
Why do companies allocate cost?
Companies allocate costs so that all elements that are part of that cost share the incurred costs. It is like spreading the costs amongst those that use it. Companies allocate costs merely to assign responsibility of those costs to either several departments within that company or to just one department. For example, think of a multi-divisional business that has to provide a security service to protect its building, all divisions in that business will share the costs of the security service.
Importance of cost allocation?
Cost allocation allows a company to determine the amount each item produced will cost. An effective cost allocation will be able to track down the shared costs of production not only to the divisions but also to the products and customers that use those costs.
How much install Dry wall per sq ftfor commercial Building?
Drywall labour costs depend largely on where you do them. Labour costs across north America differ locally.
What are the costs involved with residential care homes?
"Residential care homes all have different costs across the United Sates. It is important to know which homes you are interested in, and then search for information about those particular homes."
What is an example of an amortized expense?
The costs of long-lived intangible assets, such as patents, are allocated across time periods and reclassified as amortization expense.
What are cost centre accounting and cost element accounting in SAP controlling?
Answer Cost centers are divisions that add to the cost of the organization, but only indirectly add to the profit of the company. Typical examples include Research and Development, Marketing and Customer service Cost Element Basically, cost element are carriers of costs. Primary cost elements are like materail costs, personnel costs, energy costs... where a corresponding GL account exists in FI..to allow costs to flow... Secondary cost elements are like production costs, material overheads, production overheads, they can be created and administered in only CO. These are used in internal cost allocation, overhead calculation, settlement transactions., it does not flow to FI... Hope this helps Answer Cost centers are divisions that add to the cost of the organization, but only indirectly add to the profit of the company. Typical examples include Research and Development, Marketing and Customer service Cost Element Basically, cost element are carriers of costs. Primary cost elements are like materail costs, personnel costs, energy costs... where a corresponding GL account exists in FI..to allow costs to flow... Secondary cost elements are like production costs, material overheads, production overheads, they can be created and administered in only CO. These are used in internal cost allocation, overhead calculation, settlement transactions., it does not flow to FI.
