extract:
Cost Allocation means that we have to divide expenses between two or more parties who have benefited from the expenditure in a way that will be justifiable and acceptable to all parties.
This general definition gives you some inkling why cost allocation, although quite a simple matter in terms of the calculation processes involved, is not exactly a favorite subject with controllers or accountants.
The problem with cost allocation is that invariably one or more of the parties concerned will argue against their allotment of the expenses (unjust … totally incompetent … far from reality… the work of a moron who knows nothing about the business… blah-blah-blah --- sometimes the criticism is even well-founded and impossible to refute) all of which combines to turn the whole allocation business …
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