Cost hierarchy

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.