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Unformatted text preview: ts that applied to more than one cost
center. The creation of multiple cost centers means that some costs become indirect, thereby necessitating their distribution.
The distribution of indirect costs can be carried out in one of two ways: (1) by developing techniques that
measure indirect cost usage in considerable detail, or (2) by establishing formulas that distribute them as fairly as
possible into the appropriate cost centers.
Problem: The mechanic in the Maintenance cost center at Lawncare Inc. is supervised by someone whose salary at present is included
in the Administration cost center. What kind of a cost is the supervisor's...
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- Spring '14