(a)The purpose of this Cost Accounting Standard is to establish criteria for allocation of the expenses of a home office to the segments of the organization based on the beneficial or causal relationship between such expenses and the receiving segments. It provides for:
(1)Identification of expenses for direct allocation to segments to the maximum extent practical;
(2)Accumulation of significant nondirectly allocated expenses into logical and relatively homogeneous pools to be allocated on bases reflecting the relationship of the expenses to the segments concerned; and
(3)Allocation of any remaining or residual home office expenses to all segments.
(b)This Standard does not cover the reallocation of a segment's share of home office expenses to contracts and other cost objectives.