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Cost allocations have to make sense. What drives consumption of costs? What are drivers and how do they help in the allocation process?
Do research on the Internet and show the reference for the information. Do not forget to respond to a colleague's posting also.
Professor’s Note: In addition to searching the Internet for text related to this discussion, watch the following videos (click on the following link to access these videos) and post your comments.
http://www.youtube.com/watch?v=mRt5YMVGOxg Video 1: Activity Based Costing (Cost Hierarchy Categories, Cost Allocation Bases, ABC System Setup, Etc.)
http://www.youtube.com/watch?v=PcjxRe4EsuY Video 2: Activity Based Costing Step by Step
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