engleski

Cost Allocation Accounting Methods Used in the Croatian Production Sector

When conducting the research, two main hypothesises were set up: H1: The majority of Croatian production companies are using traditional accounting methods for cost allocation. H2: Direct production costs are taking the highest portion in production cost structure in the majority of Croatian production companies. Because of such production cost structure, modern cost allocation accounting methods wouldn’t contribute to more reliable company profitability evaluation and business decision making. The research is conducted on the basis of defined sample which include all important Croatian public production companies. Cost allocation process is not an easy, but rather difficult and complicated procedure which requires the appliance of appropriate accounting methods. The process of allocating costs to cost objects is enforced through the application of certain accounting methods. These accounting methods often cannot provide fair and objective cost allocation, because these methods are based on certain cost allocation bases which are arbitrary and not always appropriate for reliable cost allocation.

cost classifications; cost allocation methods; traditional costing systems; ABC system; croatian production companies

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