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This post continues the previous one in a way that allocations are made once again by referring to summary nodes in a dimension hierarchy. However, this time multiple allocation bases – shown in the next overview graphic – are used for making the allocations.

To realize the multiple base hierarchical allocation approach, a new cost object dimension has been setup that includes three additional summary nodes (‚110 INDIRECT’, ‘120 INDIRECT’ and ‘130 INDIRECT’). In the example used, each of those summary nodes holds a single cost center only.

In practice, each summary node typically holds multiple cost objects that are allocated to other ones by making use of the same allocation base.


With the new cost object dimension hierarchy in place, one can then refer to the different indirect summary hierarchy nodes when setting up cost allocation policies. This is exemplified in the next screenprint that shows how the different indirect cost object nodes are linked to allocation bases for cost allocation purposes.

In the example illustrated in the previous screenprint, all cost centers (respectively their costs) that belong to the ‘110 INDIRECT’ hierarchy node are allocated to the operative or ‘direct’ cost centers based on the number of employees working there.

The cost center costs of the ‘120 INDIRECT’ group are allocated based on the number of company cars and the cost center costs of the ‘130 INDIRECT’ group are allocated based on the total direct costs of the other ‘direct’ or operative cost centers.

 This example illustrates once again that previously used statistical measures and formulas can be re-used multiple times in the new D365 cost accounting module. This ability can be very beneficial for example if one wants to run simulations or tests based on previously used allocation bases.


As in all prior posts on cost allocations, the next screenprints document the obtained allocations and are summarized in an Excel document at the very end of this post.

In the next post, we will investigate how one can make use of hierarchy allocation bases. Till then.