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A good example of a semi variable cost is electricity

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Unformatted text preview: ______________________ David W. Young • Management Accounting for Managers • Chapter 1 Page 19 Copyrighted Material. Do not reproduce without written permission. Problem: Assume we create the two maintenance cost centers suggested above. What might we use as the allocation bases? What additional information would you need to collect as a result? ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• Answer: We probably still could use the number of pieces of equipment in a receiving cost center, but we now would want to determine which equipment used which maintenance cost center. Thus, the costs of the Special Equipment Maintenance center would be allocated on the basis of the number of mach...
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