ALLOCATION OF SECONDARY COSTS BY USING THE MATRIX FUNCTIONS OF SPREADSHEET PROGRAMSLazar Radovanović, Teodor M. Petrović Irina M. Glotina |
Published 07/05/2019 |
ABSTRACT
The paper describes and applies the method of linear equations, by using the matrix functions of spreadsheet programs, for the secondary cost allocation of fully- conditioned 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.
Keywords: allocation of secondary costs, linear equation method, matrix functions: TRANSPOSE, MINVERSE, MMULT.