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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.
What else can I help you with?
What is arbitrary allocation in cost accounting?
allocate cost arbitrarily
What is the impact of allocating common costs for internal decision making?
When companies choose to allocate costs they have to consider how those costs will impact the final cost of their products and services. If they allocate them incorrectly, then the final product may be over or under priced, which will negatively impact internal decision making.
Is advertising cost fixed or variable?
Advertising is a fixed cost. Many business allocate money to each quarter to cover their advertising cost for their company.
Is depreciation expense used to allocate historical cost over the life of an asset?
Yes, depreciation account is used to allocate the cost of asset over the life of asset to income statement of the fiscal year where asset utilized to earn revenue.
Why is depreciation an estimate?
Depreciation is an estimate because it is the amount which is to be calculated at the time of purchase of assets to be charged to all fiscal years before using the actual assets as companies cannot wait for full asset to be depreciate first to allocate cost to previous years.
What is arbitrary allocation in cost accounting?
allocate cost arbitrarily
What is the impact of allocating common costs for internal decision making?
When companies choose to allocate costs they have to consider how those costs will impact the final cost of their products and services. If they allocate them incorrectly, then the final product may be over or under priced, which will negatively impact internal decision making.
What are unallocated costs?
Cost that managment can not allocate to direct production or activity.
What are the ORM leadership techniques?
Allocate ORM resourses at any cost.
Is advertising cost fixed or variable?
Advertising is a fixed cost. Many business allocate money to each quarter to cover their advertising cost for their company.
What is meant by cost unit?
Cost unit is that department in company which causes the cost to allocate the product like manufacturing department, administration department etc.
Is depreciation expense used to allocate historical cost over the life of an asset?
Yes, depreciation account is used to allocate the cost of asset over the life of asset to income statement of the fiscal year where asset utilized to earn revenue.
The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called?
The process of transferring the cost of metal ores and other minerals removed from the earth to an expense account is called depletion. This accounting method allows companies to allocate the cost of natural resources over time as they are extracted and sold.
Is depreciaton to achieve the matching principal?
Yes it is to allocate the cost of an asset over its useful life
Cost basis percentages merger amerisourse and pharmerica?
Allocate .0289 (2.89%) of your cost basis in AmerisourceBergen to Pharmerica after the spinoff of .0833752 shares of Pharmerica for each AmerisourceBergen on 12/31/2007. Allocate .9711 (97.11%) to AmerisourceBergen as your new cost basis for AmerisourceBergen. The free spinoff calculator at www.costbasis.com can help you with the math.
Why is depreciation an estimate?
Depreciation is an estimate because it is the amount which is to be calculated at the time of purchase of assets to be charged to all fiscal years before using the actual assets as companies cannot wait for full asset to be depreciate first to allocate cost to previous years.
Activity based costing and cost drivers?
The best way to figure cost, and driver cost is to install a vehicle tracking system. This will give you very accurate reporting on employee use and time. In addition, you can track your vehicles and be notified if they leave a route have been stolen and much more. I recommend the Millennium Plus, it is the latest technology and is very good value offering many useful features.
