This is a flat 4000 per month utilities and other

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Unformatted text preview: then the cost on which the price is based comes closer to the true consumption of resources needed for each job. As a result, the multi-cost-center approach helps to eliminate the cross subsidization that takes place in the one-cost-center approach. ____________________________________________________________________________________________________________ David W. Young • Management Accounting for Managers • Chapter 1 Page 20 Copyrighted Material. Do not reproduce without written permission. SUMMARY OF COST ACCOUNTING CHOICES As the discussion in this chapter has indicated, the managerial choices involved in developing a cost accounting system frequently are quite difficult. Moreover, they are highly interdependent. The choice of cost centers will influence the distinction between direct and indirect costs. The choice of a particular final cost object frequently will require the use of certain intermediate cost objects, or call for certain kinds of cost centers. Allocation of service center costs will be d...
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