THE EFFECT OF COST ALLOCATION FOR SHARED SERVICES AND OVERHEADS
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- NGN 3000
Abstract: THE EFFECT OF COST ALLOCATION FOR SHARED SERVICES AND OVERHEADS
This research explores the effect of cost allocation methods for shared services and overheads in large corporations in Lagos. The study's objectives are to evaluate the effectiveness of various cost allocation methods, assess their impact on financial performance, and identify the challenges faced. A survey design was employed, with data collected from 250 financial managers and cost accountants, derived using Taro Yamane's formula. A case study of a major corporation in Lagos provided detailed insights. The reliability coefficient score was 0.87. Findings indicate that accurate cost allocation methods, such as activity-based costing, significantly improve financial performance by providing better insights into cost drivers and facilitating efficient resource allocation. However, challenges such as data collection difficulties and high implementation costs were noted. Recommendations include providing more training on cost allocation methods, simplifying the data collection process, and integrating cost allocation with overall financial management practices to enhance organizational performance.
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