Cost hierarchy
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Cost hierarchy is categorization of indirect costs into different cost pools on the basis of the different types of cost drivers, or cost-allocation bases, or different degrees of difficulty in determining cause-and-effect (or benefits received) relationships.
Definitions
According to Cost Accounting by Horngren, Datar, Rajan (14th edition),
- Cost hierarchy. Categorization of indirect costs into different cost pools on the basis of the different types of cost drivers, or cost-allocation bases, or different degrees of difficulty in determining cause-and-effect (or benefits received) relationships.
