Cost Allocation Methods at Nestl Values: Direct Costs: $40,000,000 Indirect Costs: $20,000,000 Allocation Bases: Number of Products, Labor Hours Requirements: Allocate indirect costs using the

Cost Allocation Methods at Nestlé

• Values:

• Direct Costs: $40,000,000
• Indirect Costs: $20,000,000
• Allocation Bases: Number of Products, Labor Hours
• Requirements:

0. Allocate indirect costs using the number of products as the allocation base for Nestlé.
1. Allocate indirect costs using labor hours as the allocation base for Nestlé.
2. Compare and contrast the results of the two cost allocation methods.
3. Discuss the importance of accurate cost allocation in decision-making and profitability at Nestlé.