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CHAPTER 15 ALLOCATION OF SUPPORTDEPARTMENT COSTS, COMMON COSTS, AND REVENUES151×The single rate (cost allocation) method makes no distinction between fixed costs and variable costs in the cost pool.
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How to fill out allocation of support-department costs

01
Gather all the necessary information regarding support-department costs.
02
Identify the support departments and the services they provide.
03
Determine the allocation basis, which could be factors such as labor hours, square footage, or the number of employees.
04
Calculate the total support-department costs and allocate them to the benefiting departments.
05
Allocate the support-department costs by multiplying the allocation basis by the proportionate share of each department.
06
Update the allocation of support-department costs on a regular basis to reflect any changes in expenses or department structures.
07
Review and analyze the results to ensure the allocation accurately reflects the cost-sharing among departments.

Who needs allocation of support-department costs?

01
Companies that have multiple departments or cost centers.
02
Organizations that want to accurately determine the cost of each department's operations.
03
Businesses that want to allocate support-department costs in a fair and systematic manner.
04
Companies that rely on the support departments to provide essential services or resources.
05
Managers or financial professionals responsible for budgeting and cost control within an organization.

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The allocation of support-department costs is the process of distributing shared expenses incurred by support departments to other departments within an organization.
All organizations that have support departments and multiple cost centers are required to file allocation of support-department costs.
Allocation of support-department costs can be filled out by identifying the shared expenses, determining the allocation basis, and calculating the amount to be allocated to each department.
The purpose of allocation of support-department costs is to accurately assign expenses to departments that benefit from the services provided by support departments.
The information that must be reported on allocation of support-department costs includes the total expenses of each support department, the allocation basis used, and the amount allocated to each department.
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