Service department cost allocations using the net services model and the MDTERM function in Excel

Anthony Craig Keller

Journal of Accounting Education, 2015, vol. 33, issue 3, 241-255

Abstract: A teaching note on the reformulation of service cost formulas is presented as a way to add value to the process of Reciprocal Costing by facilitating the tracing of cost between service departments, thereby increasing the accuracy of cost estimations for outsourcing decisions. Emphasis is placed on a solution method using the Excel MDETERM function and Cramer's rule that facilitates the tracing of costs between service departments.

Keywords: Service department cost allocation; Reciprocal cost allocation; Excel; Service departments; Simultaneous equations and Cramer's rule; MDETERM function; Net services model (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joaced:v:33:y:2015:i:3:p:241-255

DOI: 10.1016/j.jaccedu.2015.06.002

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