Management of Indirect Cost in The 21^st Century: Capacity Management of Network Organizations

Abstract

The problem of allocating indirect costs is an old and new problem in management accounting. In terms of the causes of indirect costs, they have the characteristics of capacity costs. If indirect costs are allocated to each product, capacity cannot be effectively managed. On the other hand, in recent years, a single organization can no longer make effective use of idle capacity. I took up the case of a network organization such as an industrial cluster, which makes effective use of idle capacity through mutual utilization of resources across organizations. I have shown that in this century, capacity management through mutual utilization of resources by network organizations is effective.