Al-Jo’anee Company: support department cost allocations with matrices, to improve decision making | ||
| Tikrit Journal For Administration & Economics Sciences | ||
| Article 1, Volume 1, Issue 37, April 2018, Pages 287-298 | ||
| Authors | ||
| Saad S. Hussein; Dennis F. Togo | ||
| Abstract | ||
| ABSTRACT : The aim of this paper is to solve the complexity of cost allocation problem where the support center at Al-Joa’anee company have a reciprocate services along with the production (operation) centers. The study used a spread sheets of excel to apply matrices to allocate the indirect costs. The company has seven centers in which two of them are production centers; the rest are called the supporting centers where they work to facilitate the production process. Many methods in cost accounting have been proposed, Via the direct method, the step-down method, the individuality method and the reciprocal methods. However not all the methods has the same applications at the process of cost allocation on the production methods, for instance, the direct methods assume there is no inter-services among the support centers. The proposed methods though has its own complexity for application but it can solve the problem of reciprocate services among the support centers. The study has proposed a systematic approach to apply the reciprocal method for Al Al-Jo’anee Company. | ||
| Keywords | ||
| matrix; based cost allocations; reciprocal method | ||
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