Many organizations have departments that provide services to other departments. For example, a janitorial department delivers services to the rest of a company, including the production departments ...

Prior work has examined models in which the reciprocal cost allocation method yields allocation rates that are equal to the marginal costs of operating service departments. We extend this work by ...

Using the appropriate overhead rates for a business helps managers with budgeting, job costing and product pricing. Different types of allocation methods result in varying figures for the same ...