ACC501 case 4



ACC501CS4 – (3-5 pages typed and double-spaced courier new 12 font)

Case assignment expectations:

Below are several required readings on the topic of cost allocation. You are to read and review these readings and answer the questions below the readings in an integrated essay.

US Army Corps of Engineers – Walla Walla Project retrieved May 9, 2011”>

City of Seattle Budget for 2009 – 2010 retrieved may 9, 2011 from:”>

US Department of Human Services, Financial Accounting, Division of Cost Allocation retrieved May 9, 2011 from:”> (search for Cost Allocations)

LENGTH: 3-5 pages typed and double-spaced

The following items will be assessed in particular:

Cost Allocation

  1. Why does the US Army Corp of Engineers worry about cost allocations? Aren’t they a branch of the US Federal Government? Why does it matter whether or not costs are allocated?
  2. The City of Seattle reading lists a series of costs and associated cost drivers for allocating these costs. Do you agree with the cost drivers (cost allocation factors)? Why do you suppose these drivers were selected? Does it make sense to have all of these individual costs and drivers identified or should there be a more uniform method of allocating costs? Why do they allocate costs anyway in a government (City Government) setting — aren’t cost allocation methods mostly for manufacturing companies?
  3. Why does the US Department of Human Services have a special division just for Cost Allocation? What are some of the ways in which they administer cost allocation for hospitals, colleges, and non-profit organizations?
  4. Is cost allocation only relevant for government agencies like those above? Why or why not? Support your arguments with references or examples as appropriate.


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