A Study of Behavioural Variables Influencing Cost Allocation Systems

There is growing evidence that a number of factors influence cost allocation practices in organizations. This paper uses a belief-behaviour-performance research framework to find a chain of causal relations affecting the effectiveness of cost allocation systems. Four hypotheses relating to the effects of cost allocation systems is developed for this empirical study.

A total of fifty companies consisting mainly of middle-level managers who have handled cost allocation systems formed the sample for this study. It is found that managers show an increasing interest in understanding and encouraging cost allocation in their organizations. One of the notable findings is that a strong relationship exists between attitudes and behaviour in regard to cost allocations. However, there is a need for future research in this area.