What exactly is cost allocation????

Question

And does anyone know the difference between "Allocation Units" and "Gross Allocated" if I was looking at a data table? Thanks.

Answer 1

Cost allocation - is a method to determine the cost of services provided to users of that service.  It does not determine the price of the service, but rather determines what the service costs to provide.  It is important to determine the cost allocation of the services that the FAA provides, in order to determine a justifiable fee/charge/tax for those services.

http://www.library.unt.edu/gpo/NCARC/whi...

Allocation Units - Factors used in the Toll Design Calculation to allocate costs to various services (e.g., demand volume throughput and distance).

http://www.paiutepipeline.com/seca.htm

Not sure about "Gross" difference, but seems like it take into account not only active units but also spare/reserves or consumed/damaged etc.

Answer 2

www.library.unt.edu/gpo/NCARC/whitepaper...