Explore BrainMass

Explore BrainMass

    Allocation of Indirect cost

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

    How do companies decide what allocation bases to use to allocate indirect costs to departments?

    © BrainMass Inc. brainmass.com October 9, 2019, 9:30 pm ad1c9bdddf

    Solution Preview

    The response addresses the queries posted in 422 words with references.
    //Cost includes indirect as well as direct cost. These costs are allocated to different departments for the optimum utilization of resources. There are different bases according to which indirect costs are allocated to the various departments of an organization.//

    An organization or a company refers to an association of a group of people who have come together to achieve certain common goals that cannot be achieved individually. The cost so incurred is of two types, direct and indirect. The direct costs include those costs that can be directly identified with the production of the products or services of the company. Indirect costs are those ...

    Solution Summary

    This response addresses the queries posed in 422 Words, APA References.