ACC513 Managerial Accounting Lesson 6 –Allocating Costs to Responsibility Centers Introduction In this lesson students explore the nature of common or indirect costs. They also become aware of why companies allocate common costs to departments and products. Examples of how service department costs are allocated to production departments are presented. The allocation of marketing and administrative expenses as well as the allocation of joint-process costs is discussed. Lesson Learning Objectives By the conclusion of this Lesson you should be able to: Explain the nature of indirect costs. Allocate service department costs to production departments. Explain why activity-based costing is used Read More …