Assigning Support cost
What are various methods to assign support cost?
Expert
Some of the methods to assign support cost are as follows:
A) Direct Allocation Method
B) Step-Down Method (also termed as Sequential Allocation Method)
C) Reciprocal Method
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Support Costs: Costs of activities are not directly related with the production. Typical illustrations are the costs of automation support, postage, communications, process engineering, and purchasing.
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Traceability: The capability to assign a cost directly to a particular activity or cost object by identifying or observing particular resources used by the activity or cost object.
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Common Cost: It is the cost of resources used jointly in the production of two or more outputs and the cost can’t be directly traced to any one of those outcomes.
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