f Internal financing a n - the dilemma Fairness Effi ciency · f ina c g Internal financing - the...
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Internal financing Internal financing - the dilemma Fairness Efficiency
Transcript of f Internal financing a n - the dilemma Fairness Effi ciency · f ina c g Internal financing - the...
Int
erna
l financing Internal financing
- the dilemma
Fairness Effi ciency
Int
erna
l financing
Two internal allocation
techniques
%
As a percentage
As a fi xed amount
Int
erna
l financing
Examples of cost allocation basis when a fixed amount is used
Direct labour costs
Number of studentsTime units
As a fi xed amount
Int
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l financing
10060
Cost allocation principle when a fixed amount is used - three levels
175
3045
75 2030
55
3050
903050
85
7550
Int
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l financing
175
Cost allocation principle when a fixed amount is used - two levels
4575 30
55
50
90
50
85
Int
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l financing
Cost allocation basis when a percentage
is used
As an exception:
Direct labour costs
Direct labour costs + Direct operational costs
Int
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l financing
15 %
14 %
Cost allocation principle when a percentage is used - three levels
14 %
15 %
20 %
20 %
14 %
15 %
22 %
22 %
16 %
15 %
21 %
21 %
16 %
15 %
19 %
19 %
16 %
Int
erna
l financing
27 %
27 %
20 %
20 %
27%
22 %
22 %
27 %
21 %
21 %
27 %
19 %
19 %
Cost allocation principle when a percentage is used - two levels
