The cost allocation, also called cost splitting or cost allocation, is part of cost accounting. In doing so, costs are offset against reference values.
Table of Contents
Definition / explanation
The cost allocation principle is a procedure for converting costs to selected reference values (cost drivers or cost influencing factors). The allocation of the cost amounts depends on the tasks of cost and revenue management or cost accounting.
The different cost allocation approaches are determined by the tasks of management, i.e. publication, steering, planning, control and calculation.
With the cost allocation principle, the Unit cost calculate. The fixed ones Overhead represent a difficulty in the cost allocation, as these arise (regardless of how high the output volume is) and are difficult to allocate.
One-dimensional cost allocation principles
In cost allocation, a distinction is made between one-dimensional and multi-dimensional cost allocation principles.
Causation principle: Es können nur die tatsächlich eingesetzten Produktionsfaktoren der Kostenträgereinheit zugerechnet werden. Beim Verursachungsprinzip werden beschäftigungsvariable Overhead sowie die Einzelkosten dem Payers added. The causation principle is used in marginal costing
Stress principle: With the utilization principle, the costs that are additionally used are allocated to the cost unit. There can be not only marginal costs, but also Utility costs will be charged. If the production is reduced by one unit, the total costs are reduced by this unit, but not the utility costs allocated to this unit. They increase Idle costs. The stress principle is used in process costing
Average principle: The costs are assigned based on a statistical number of relationships. It is not suitable for cost planning and cost control, as no decision-relevant costs are determined. In the Full cost accounting the principle of average is used for the addition of fixed overhead costs
Plausibility principle: Es werden andere Kostenarten als Beziehungszahl zugerechnet, z.B. werden die Materialgemeinkosten als Beziehungszahl für die verwendeten Direct material costs umgerechnet. Je höher die Direct material coststhe higher the attribution of Material overhead
Load capacity principle: Here the allocation of the costs depends on the sales proceeds. Higher-selling products are also likely to incur higher costs and therefore receive a higher proportion of the cost
Multi-dimensional cost allocation principles
Decision principle: The objects of reference are business decisions. Only costs will be added that result from the decision to manufacture the product.
Identity principle: It is a further development of the decision-making principle. The identity principle characterizes the decision through the performance dimension, organizational dimension and time dimension. Thus, the three dimensions of the reference objects are the operational performance, the period and the organizational area. The identity principle is the basis for the relative direct cost calculation.