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The article examines the computation of marginal costs in reciprocal allocation models within service departments.

Variable and Self-Service Costs in Reciprocal Allocation Models.

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The article examines the computation of marginal costs in reciprocal allocation models within service departments.
Investigated the properties of the reciprocal service department cost allocation model.
Analyzed costs assuming all service department costs are variable.
Evaluated the impact of self-service costs on allocations to other departments.
Found that final costs must assist in management decisions by reflecting incremental costs.
Observed that self-service costs should not influence allocations to other departments.
Highlighted that varying treatment of self-service costs leads to differing allocation results.

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Analyzing cost allocation in service departments highlights challenges with self-service costs, suggesting improved methods.

Robert S. Kaplan (1973) studied this question.

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