Explore BrainMass

Explore BrainMass

    Cost Accounting: How to change the single overhead pool cost allocation

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Art and Bert provide tax consulting for estates and trusts. Their job costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (research support). The indirect-cost pool contains all the costs except direct personnel costs. All budgeted indirect costs are allocated to individual jobs using actual professional labor-hours.

    What might be some ways for the firm to change from a one-pool allocation concept ?

    © BrainMass Inc. brainmass.com June 3, 2020, 5:38 pm ad1c9bdddf
    https://brainmass.com/business/financial-accounting-bookkeeping/cost-accounting-how-to-change-the-single-overhead-pool-cost-allocation-33405

    Solution Preview

    An important way of changing from one pool allocation is to divide indirect costs into activities like cost of documentation, communication costs and traveling cost. The cost of documentation can be allocated on the basis of the number of pages of the final report, the communication and ...

    Solution Summary

    The solution suggests several ways to reallocate indirect costs based on other allocation strategies.

    $2.19

    ADVERTISEMENT