Title

An examination of support department cost allocations.

SelectedWorks Author Profiles:

Debra Sinclair

Document Type

Article

Publication Date

2006

Date Issued

January 2006

Date Available

July 2014

ISSN

1541-165

Abstract

This study examines three factors that influence support cost allocations: the complexity of the support service usage, the accounting system capability, and management beliefs about the usefulness of allocations. Critics believe that any allocations are arbitrary and cause incorrect decisions; however, allocations are integral to new cost systems such as Resource Consumption Accounting (RCA) and Granzplankostenrechnung (GPK). We find that support cost allocations are inadequately incorporated into most cost systems. The reason is not that there is little cross-departmental use of services or that accounting systems are inadequate. Rather, the belief of financial managers that the information is useful is the main factor critical to firms' use of support cost allocation systems. These results have implications for systems implementation and education.

Comments

Citation only. Full-text article is available through licensed access provided by the publisher. Published in The Journal of Cost Analysis & Management, 8(1), 37-54. doi: 10.1080/15411656.2006.10462255.

Language

en_US

Publisher

Society of Cost Estimating and Analysis

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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