Statutes, codes, and regulations
Code of Federal Regulations
Title 48 - FEDERAL ACQUISITION REGULATIONS SYSTEMChapter 99 - COST ACCOUNTING STANDARDS BOARD, OFFICE OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGETSubchapter B - PROCUREMENT PRACTICES AND COST ACCOUNTING STANDARDS
Part 9904 - COST ACCOUNTING STANDARDS
Section 9904.403-60 - Illustrations

48 C.F.R. §§ 9904.403-60

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Current through September 30, 2024
Section 9904.403-60 - Illustrations
(a) The following table lists some typical pools, together with illustrative allocation bases, which could be used in appropriate circumstances:

Home office expense or functionIllustrative allocation bases
Centralized service functions:
1. Personnel administration1. Number of personnel, labor hours, payroll, number of hires.
2. Data processing services2. Machine time, number of reports.
3. Centralized purchasing and subcontracting3. Number of purchase orders, value of purchases, number of items.
4. Centralized warehousing4. Square footage, value of material, volume.
5. Company aircraft service5. Actual or standard rate per hour, mile, passenger mile, or similar unit.
6. Central telephone service6. Usage costs, number of instruments.

(b) The selection of a base for allocating centralized service functions shall be governed by the criteria established in 9904.403-50(b).
(c) The listed allocation bases in this section are illustrative. Other bases for allocation of home office expenses to segments may be used if they are substantially in accordance with the beneficial or casual relationships outlined in 9904.403-40.

Home office expenses or functionIllustrative allocation bases
Staff management or specific activities:
1. Personnel management1. Number of personnel, labor hours, payroll, number of hires.
2. Manufacturing policies, (quality control, industrial engineering, production, scheduling, tooling, inspection and testing, etc2. Manufacturing cost input, manufacturing direct labor.
3. Engineering policies3. Total engineering costs, engineering direct labor, number of drawings.
4. Material/purchasing policies4. Number of purchase orders, value of purchases.
5. Marketing policies5. Sales, segment marketing costs.
Central payments or accruals:
1. Pension expenses1. Payroll or other factor on which total payment is based.
2. Group insurance expenses2. Payroll or other factor on which total payment is based.
3. State and local income taxes and franchise taxes3. Any base or method which results in an allocation that equals or approximates a segment's proportionate share of the tax imposed by the jurisdiction in which the segment does business, as measured by the same factors used to determine taxable income for that jurisdiction.

48 C.F.R. §§9904.403-60