Definitions for cost allocation
cost al·lo·ca·tion

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1. Cost allocation

   Cost allocation is a process of providing relief to shared service organization's cost centers that provide a product or service. In turn, the associated expense is assigned to internal clients' cost centers that consume the products and services. For example, the CIO may provide all IT services within the company and assign the costs back to the business units that consume each offering. The core components of a cost allocation system consist of a way to track which organizations provides a product and/or service, the organizations that consume the products and/or services, and a list of portfolio offerings (e.g. service catalog). Depending on the operating structure within a company, the cost allocation data may generate an internal invoice or feed an ERP system's chargeback module. Accessing the data via an invoice or chargeback module are the typical methods that drive personnel behavior. In return, the consumption data becomes a great source of quantitative information to make better business decisions. Today’s organizations face growing pressure to control costs and enable responsible financial management of resources. In this environment, an organization is expected to provide services cost-effectively and deliver business value while operating under tight budgetary constraints. One way to contain costs is to implement a cost allocation methodology, where your business units become directly accountable for the services they consume. An effective cost allocation methodology enables an organization to identify what services are being provided and what they cost, to allocate costs to business units, and to manage cost recovery. Under this model, both the service provider and its respective consumers become aware of their service requirements and usage and how they directly influence the costs incurred. This information, in turn, improves discipline within the business units and financial discipline across the entire organization. With the organization articulating the costs of services provided, the business units become empowered – and encouraged – to make informed decisions about the services and availability levels they request. They can make trade-offs between service levels and costs, and they can benchmark internal costs against outsourced providers.

U.S. National Library of MedicineRate this definition:0.0 / 0 votes

1. Cost Allocation

   The assignment, to each of several particular cost-centers, of an equitable proportion of the costs of activities that serve all of them. Cost-center usually refers to institutional departments or services.

How to pronounce cost allocation?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say cost allocation in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of cost allocation in Chaldean Numerology is: 7

2. Pythagorean Numerology

   The numerical value of cost allocation in Pythagorean Numerology is: 6

References

1. ^ Wikipedia
   https://en.wikipedia.org/wiki/Cost_Allocation