Common cost

A common cost is a cost that is not attributable to a specific cost object, such as a product or process. For example, the cost of rent for a production facility is not directly associated with any single unit of production that is manufactured within that facility, and so is considered a common cost. When a common cost is associated with the manufacturing process, it is included in factory overhead and allocated to the units produced. When a common cost is associated with administrative functions, it is charged to expense as incurred.

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Cost Accounting Fundamentals