what is the result of dividing the indirect cost pool by the cost allocation base?
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An indirect cost allocation base is some measure of direct contractor effort that can be used to allocate pool costs based on benefits accrued by the several cost objectives. Examples of typical bases: Direct labor hours; • Direct labor dollars; • Number of units produced; and • Number of machine hours.
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Indirect costs can be allocated individually by line item (e.g. “board expense” or “audit”) or accumulated in a single indirect pool and expensed as one line item (“indirect expense”) using some kind of indirect rate.
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