Difference between revisions of "Cost Allocation"
(Created page with "'''Cost Allocation''' is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company. It i...") |
m |
||
| Line 1: | Line 1: | ||
'''Cost Allocation''' is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company. It involves identifying the cost objects in a company, identifying the costs incurred by the cost objects, and then assigning the costs to the cost objects based on specific criteria. When costs are allocated in the right way, the business is able to trace the specific cost objects that are making profits or losses for the company.<ref>Definition - What Does Cost Allocation Mean? [https://corporatefinanceinstitute.com/resources/knowledge/accounting/cost-allocation/ CFI]</ref> | '''Cost Allocation''' is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company. It involves identifying the cost objects in a company, identifying the costs incurred by the cost objects, and then assigning the costs to the cost objects based on specific criteria. When costs are allocated in the right way, the business is able to trace the specific cost objects that are making profits or losses for the company.<ref>Definition - What Does Cost Allocation Mean? [https://corporatefinanceinstitute.com/resources/knowledge/accounting/cost-allocation/ CFI]</ref> | ||
| + | |||
| + | |||
| + | == See Also == | ||
| + | *[[IT Chargeback]] | ||
Revision as of 00:30, 3 January 2023
Cost Allocation is the process of identifying, accumulating, and assigning costs to costs objects such as departments, products, programs, or a branch of a company. It involves identifying the cost objects in a company, identifying the costs incurred by the cost objects, and then assigning the costs to the cost objects based on specific criteria. When costs are allocated in the right way, the business is able to trace the specific cost objects that are making profits or losses for the company.[1]