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
Cost Assignment: A procedure which identifies costs with activities, outputs, or another cost objects. In a wide sense, costs can be assigned to activities, processes, products, organizational divisions, and services. There are three
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Cost Accounting Practice: Any disclosed or recognized accounting process or technique that is used for the measurement of cost, assignment of cost to cost objects and assignment of cost to accounting periods.
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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.
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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