What is cost Allocation?

Answer 1

Cost allocation is the process of dividing and assigning the total costs of an organization or a project to specific activities, products, or services. It helps in identifying the true costs of different processes, products, or services, and also provides insight into the profitability of various segments. Cost allocation is an important aspect of managerial accounting that helps businesses in making informed decisions related to pricing, budgeting, and resource allocation.