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To compute the fixed and variable components of the

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Unformatted text preview: ines in the receiving cost centers that require special maintenance. The costs of the General Maintenance center would be allocated on the basis of all other machines in a receiving cost center. There, of course, would be complications if certain pieces of equipment required both general and special maintenance. ••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• Impact on Customer Prices. Information structured into multiple cost centers can be extremely useful for pricing purposes. If we assume for the moment that LI’s management wants a 10 percent markup over costs when pricing its services, the multi-cost-center approach will give a very different pri...
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