Cost allocations are a “loaded” topic. Ha, excuse the pun. Seriously, the cost allocation process is fraught with political pitfalls as departments fight over paying their “fair share” of allocated costs for services that benefit multiple cost centers in your organization.
This paper discusses some common approaches to the cost allocation process and some common allocators that have been developed for cost allocators to mimic the behavior of their cost causation factors.
Download the whitepaper: Shared services utility accounting >