Basic full costing method
Management accounting and costs analysis

All expenses are processed for allocation to costs. We give priority to the criterion of destination, and neglect that of variability. Direct and indirect costs are treated differently.

In the simplest version, the level of activity is considered "normal". Taking into account the effects of under- or over-activity is the subject of a more sophisticated approach, with "rational allocation" of fixed costs, as we shall see later.

3.1.1 Allocation of direct expenses