An Introduction to Cost Allocation
Lynch, Luann J.
An Introduction to Cost Allocation
C-2506 | Published March 24, 2025 | 14 pages Technical Note
Collection: Darden School of Business
Product Details
This note discusses the concept of cost allocation, focusing specifically on allocating overhead, or indirect, costs to products and services. It presents a four-step process to designing cost-allocation systems and applies those steps to allocating overhead costs in both traditional and activity-based costing systems.
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