Sub: Accounts Topic: Allocation of Costs
Cost allocation between departments.
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Why does the US Army Corp of Engineers worry about cost allocations? Aren't they a branch of
the US Federal Government? Why does it matter whether or not costs are allocated?
Need for cost allocation from federal perspective
Cost allocation is a method to determine the cost of services provided to users of that service. It
does not determine the price of the service, but rather determines what the service costs to
Cost allocations are made to derive an equitable distribution of project costs among authorized
project purposes. Laws and regulations requiring reimbursement or cost-sharing generally
specify recovery of costs