33:010:451 Lecture 4: Ch. 15
13 Oct 2017
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Support dept: what should co. do when it has for example, cafeteria costs or hr costs? (not revenue-centers that generate 23042) Bundled goods: co. typically sell many packages how should revenue allocation be done in case of bundled goods? (ie: selling a bundle of tv & phone) Several methods = used 2 allocate costs: single-rate method: company takes all costs of dept & allocates them using single driver (doesn"t differentiate between variable, xed costs, or diff allocation pools) More easy 2 implement but crude: dual-rate method: break variable & xed costs in2 2 separate pools & use different allocation base. Methods of allocating support costs to production departments: Add individual costs & gure out percentages to determine how much should be allocated to each user: incremental cost-allocation: ranks individual users in order of users most responsible for common cost. Primary user gets bulk of cost; secondary user gets incremental cost, etc.
