1. Identify cost objects and cost drivers. |
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2. Distinguish direct costs from indirect costs. |
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3. Allocate indirect costs to cost objects. |
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4. Select appropriate cost drivers for allocating indirect costs. |
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5. Allocate costs to solve timing problems. |
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6. Allocate joint product costs. |
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7. Recognize the effects of cost allocation on employee motivation. |
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8. Allocate service department costs to operating departments (Appendix). |