first to be allocated to so-called production cost centres, and then through 
these to the various products. 
As it may often be difficult to allocate all indirect costs simultanously 
to these production cost centres, the concept of auxiliary cost centres is 
introduced which implies that certain indirect cost elements are first allocated 
to such auxiliary cost centres, and then are apportioned to the production 
cost centres according to certain logical keys. The problem of the establish- 
ment of Basic Cost Standards applicable to individual organisations there- 
fore requires: e a 
— the identification and quantification of all cost-generating factors within 
the organisation; 
— the identification and definition of the various production cost centres 
and the necessary auxiliary cost centres; and 
— the allocation of all cost-generating items to the various production cost 
centres. 
The obvious objective of this must be to ensure that, provided 
production is carried out as anticipated, all cost items are completely 
accounted for in the established cost of the products. In attempting to 
apportion all indirect cost elements to the proper basic cost standards, how- 
ever, a suitable balance has to be struck between too great a generalisation 
on the one hand, which could lead to significantly distorted values, and a 
too detailed approach on the other, which would require too great an effort 
without significantly influencing the required data. 
General cost categories in an organisation are: 
salaries and wages, which include items such as social insurance, overtime 
costs, field allowances, training programme costs, gratuities, etc; © eo 
equipment (including depreciation or rent) and other items of capital 
investment such as computer software, transport costs, taxes, costs of 
installation and training, maintenance, insurance, etc; 
material costs including taxes, transport costs, storage and handling costs, 
allowance for wastage, etc; 
space costs of both buildings and land (including depreciation or rent), 
furniture, maintenance costs, electricity, heating, water supply costs, 
insurances, etc.