Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed


Indirect-cost pools and cost allocation



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Indirect-cost pools and cost allocation
The distinction is often not clear-cut between (1) direct costs and (2) indirect costs that are allocated on a cause-and-effect basis using a cost driver. For example, in a company that meters the number of photocopies made by each department, are copying costs director indirect with respect to using departments Ask students to classify individual cost components that would be classified as direct to a particular copying job versus those that would be indirect to that job.

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