An unallocated cost in one company may be an allocated cost in another company.

Question

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Unallocated costs are indirect costs that cannot be easily traced to a specific cost object, department or product. These costs are usually shared among different departments or cost centers in a company. The method and basis of allocation may vary across different companies depending on their nature, operations, and accounting policies. Therefore, an unallocated cost in one company may be allocated differently or included in a different cost category in another company.

An Unallocated Cost in One Company May Be an Allocated