ALLOCATION OF SECONDARY COSTS BY USING THE MATRIX FUNCTIONS OF SPREADSHEET PROGRAMS
The paper describes and applies the method of linear equations, by using the matrix
functions of spreadsheet programs, for the secondary cost allocation of fullyconditioned
auxiliary cost centers. The aim of the paper is to demonstrate the possibility
of using matrix functions for cost allocation. A model has been formed based on the
data from a specific company, that has auxiliary, main and non-productive cost centers.
The linear equations method is used to solve the problem of secondary cost allocation,
by applying the corresponding matrix functions of a spreadsheet program.
The goal of cost allocation of auxiliary cost centers to main cost centers, and later to the
cost holders, is to calculate the exact cost, that is, the cost of products and services.
The method of linear equations was chosen because a new model can be formed based
on the starting model, by changing the number of cost centers.
This cost allocation model should encourage accountants and company management to
use the more exact method of cost allocation instead of the simple direct method or
complex step method. Matrix functions facilitate the method of linear equations,
because they are quite simple to apply in models that can be easily adapted and applied
in practice later on.
It has been concluded that this method can be easily described and applied, and the
obtained results, with the correct data input and use of matrix functions, give
completely accurate results, unlike other cost allocation methods.