See Also: Administration Expenses Outsource Definition Advantages of PEO Services for the Business Owner Sunk Costs Joint Costs Service Department Definition Many companies require support activities as well as core activities to produce their goods and/or services. Support services, or a service department, do not contribute directly to the production of goods or the providing
Service Department Cost Allocation In accounting, allocate the costs of support service departments to the different departments within the organization that make use of those support services. There are several methods for allocating the costs of support service departments, including the two following methods: Direct method Step method allocation Step Method Allocation Using the step method
See Also: Segmenting Customers for Profit Activity Based Management Standard Costing Process Costing Activity Based Cost Allocation Implementing Activity Based Costing All of us have used cost allocation, the process of assigning common costs to ending inventory and cost of goods sold (COGS), as part of our Financial Services offerings since it is required by
See Also: Agency Costs Make-or-Buy Business Decision Lease Agreements Lessor versus Lessee National Association of Professional Employer Organizations (NAPEO) Service Department Cost Allocation In accounting, the costs of support service departments are allocated to the different departments within the organization that make use of those support services. There are several methods for allocating the costs
See Also: Implementing Activity Based Costing Activity Based Cost Allocation Let’s dig into activity based cost allocation. But first, we need to note that not all the allocation methods are based on the “cause and effect” concept. This is important because CEOs and other managers need to know what the real cost of a product
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