Perfect cost allocation methodology


Problem:

I have found that allocation of costs can be a very controversial subject when asking managers to control costs.

I learned that some feel that the methods of allocation may be too arbitrary. If one were asked to design the "perfect" cost allocation methodology, where would one start? I am at a loss?

What would be some of the aspects that should be considered in designing the system?

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Accounting Basics: Perfect cost allocation methodology
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