Posts Tagged ‘activity driver’

Fake Cost Drivers for Administrative Overhead

A recent discussion in an online cost modeling forum related to “Which cost drivers can you use to assign administration overheads to a wide product range in a manufacturing concern.” As the discussion evolved, one response said “it is best done through the driver of turnover of the product produced. … because the efforts of […]


Simple Rules for Cost Allocation

Invariably, when the subject of costing comes up, the discussion evolves to a discussion of possible allocation bases, or ways that cost can be distributed to products. However, this polite discussion often degenerates into arguments (could we say battles) over who’s doing what to whom with product cost.