Cost allocation principle

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A cost allocation principle is a procedure for converting costs to reference values. If, for example, a product unit is selected as the reference value, the costs of this unit can be calculated depending on the allocation principle used. This gives the unit cost .

The (fixed) overhead costs represent a particular difficulty within the cost allocation , as they are usually incurred regardless of the output volume of the cost unit and are therefore difficult to allocate to a unit.

A distinction is made between one-dimensional and multi-dimensional cost allocation principles.

One-dimensional cost allocation principles

the only reference variable here is employment

Causation principle

The causation principle states that a cost carrier unit only those factors of production can be attributed, which are used in addition to the creation of this unit. The costs that can be allocated to the cost unit are therefore its marginal costs . According to the causation principle, the direct costs as well as the employment-variable overhead costs can be allocated to the cost units. However, it is not possible to allocate the fixed employment costs. The causation principle is used in systems of marginal cost accounting .

Stress principle

According to the utilization principle , a cost unit can be assigned the costs that are additionally used when the unit of measure is generated. In addition to the allocation of marginal costs, it also enables the allocation of utility costs . If the production is reduced by one unit, the total costs do not decrease in the amount of the utility costs allocated to that unit. It only increases the share of idle costs in fixed employment costs. The stress principle is used in process costing .

Average principle

The average principle is a one-dimensional cost allocation principle that distributes costs to the cost unit based on a statistical number of relationships . It is mainly used in full cost accounting systems for the conversion of the remaining employment fixed overhead costs used in the product units. The average principle is largely rejected in modern cost accounting theory, as it does not determine any costs relevant to decision-making and is therefore not suitable for planning and controlling costs. It does not allow a more detailed analysis of the cost influencing factors, nor is it possible to analyze the causes of deviations within the scope of cost control. It is mainly used in two forms:

Plausibility principle

In this case, a different cost type is used as the relationship number . For example, by using the ( usually easy to determine) material direct costs as a relationship number, the material overhead costs can be converted to the cost objects . This is based on the idea that the amount of material overhead has "something" to do with the amount of direct material costs. The higher the direct material costs of a product unit, the more material overhead costs are then added to it.

Load capacity principle

Here, the costs are allocated depending on the sales revenue of the respective cost object. High-revenue products should also receive a higher share of the costs, since they “presumably” also cause higher costs.

Multi-dimensional cost allocation principles

Decision-making principle

Costs are only assigned to a product if they are triggered directly by the decision to manufacture the product. The reference objects of the decision-making are therefore entrepreneurial decisions.

Identity principle

The identity principle is a further development of the decision-making principle and forms the basis for the application of relative cost accounting . The identity principle characterizes a business decision through three dimensions:

  • Performance dimension ("What and how much should be produced?")
  • Organizational dimension ("Who should manufacture it?")
  • Time dimension ("When should it be made?")

Accordingly, the reference objects of the identity principle have three dimensions:

  • Operational performance (product unit, product type, product group, product range)
  • Organizational area (company, plant, group, department)
  • Period (month, quarter, year)

Reference object hierarchies arise from superordinate and subordinate relationships within the categories. Direct costs at a higher decision-making level therefore also represent overhead costs at a lower decision-making level.


  • Hans-Jörg Hoitsch, Volker Lingnau: Cost and revenue accounting. A controlling-oriented introduction. 3rd, revised and expanded edition. Springer, Berlin et al. 1999, ISBN 3-540-66296-0 .
  • Paul Riebel : Direct cost and contribution margin accounting. Basic questions of a market and decision-oriented corporate accounting. 7th, revised and significantly expanded edition. Gabler, Wiesbaden 1994, ISBN 3-409-26095-1 .
  • Marcell Schweitzer, Hans-Ulrich Küpper: Systems of cost and revenue accounting . 8th revised and expanded edition. Vahlen, Munich 2003, ISBN 3-8006-3009-5 , ( Vahlen's handbooks of economics and social sciences ), pp. 55–57.

Individual evidence