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This process incorporates the high level cost object structure, as defined by budget and accounting, into the model framework. This also includes defining the relationships of the high level cost objects to the responsibility segments. Cost Object. This is an activity or item whose cost is to be measured. In a broad sense, a cost object can be an organizational division, geographical area (e.g., district, region, etc.), cost center, program, activity, task, product, service, customer, or asset. Cost objects may be decomposed into lower level cost objects to the extent required. As an example, the purpose of cost accounting by a responsibility segment is to measure the costs of its outputs. These outputs may be the services or products that the segment produces and delivers, the missions or tasks that the segment performs, or the customers or markets that the responsibility segment serves. There may be intermediate cost objects that are used in the course of the cost assignment process. |