Service department cost allocations using the net services model and the MDTERM function in Excel
A teaching note on the reformulation of service cost formulas is presented as a way to add value to the process of Reciprocal Costing by facilitating the tracing of cost between service departments, thereby increasing the accuracy of cost estimations for outsourcing decisions. Emphasis is placed on a solution method using the Excel MDETERM function and Cramer's rule that facilitates the tracing of costs between service departments.
School of Accountancy
Excel, MDETERM function, Net services model, Reciprocal cost allocation, Service department cost allocation, Service departments, Simultaneous equations and Cramer's rule
Keller, Anthony Craig. "Service department cost allocations using the net services model and the MDTERM function in excel." Journal of Accounting Education 33, no. 3 (2015): 241-255.
Journal of Accounting Education