Disproportionate joint cost allocation at individual-farm level using maximum entropy

This paper addresses the allocation of joint cost among enterprises – also called ‘production branches’ or ‘activities’ – and presents an approach based on maximum entropy and standard costs from farm-management literature as allocation factors. The approach allows us to discard the widely applied assumption of a proportional joint cost allocation. Since it provides a disproportionate joint cost allocation, the distinctive feature of the approach is that it favours the adjustment of large standard costs rather than of small ones.


Issue Date:
2014-08
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/182851
Total Pages:
7




 Record created 2017-04-01, last modified 2017-08-27

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