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Article
An examination of support department cost allocations.
Faculty Publications
  • Timothy Cairney
  • Debra T. Sinclair
SelectedWorks Author Profiles:

Debra Sinclair

Document Type
Article
Publication Date
2006
Date Issued
January 2006
Date Available
July 2014
Disciplines
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
Citation Information
Cairney, T.D. & Sinclair, D.T. (2006). An examination of support department cost allocations. The Journal of Cost Analysis & Management, 8(1), 37-54. doi: 10.1080/15411656.2006.10462255