What does it really cost? Allocating indirect costs

Abstract

Better managerial control in terms of decision making and understanding the total costs of a system or service result from allocating indirect costs. Allocation requires a three‐step process of selecting cost objectives, pooling related overhead costs, and selecting costs bases to connect the objectives to the pooled costs. Allocation may be simple, relying on a single base, or activity‐based costing (ABC), relying on multiple bases. Contrasts the methods of allocation, and argues that ABC may be more useful for costing electronic services.

Citation

Snyder, H. and Davenport, E. (1997), "What does it really cost? Allocating indirect costs", The Bottom Line, Vol. 10 No. 4, pp. 158-164. https://doi.org/10.1108/08880459710183035