Regulations Governing the Accounting Systems and Standard Formulas of the Cable Radio and Television System Operators Article 23

When the indirect cost pools of service departments mutually provide service for each other, the cost allocation shall choose one of the following methods:1. Cross-allocation method: the costs of service department shall be allocated to all departments, including the operation departments and service departments, it served based on the ratio of service which it had provided.2. Step-allocation method: the costs of service department shall be allocated to all operation departments and service departments it served. However, when the cost of a certain service department has been fully allocated, that service department will no longer accept the costs directly or indirectly allocated from the succeeding service departments. The allocation order shall begin from the service department which provided most services or had the greater cost amount, and then allocates the rest step by step.3. Direct allocation method: the costs of service departments shall be directly allocated to each operation department, the costs of each service department shall not be mutually allocated.The service department in the previous paragraph shall refer to the departments that serve other departments, and have no direct connection to the labor or production and sale of the products; the operation departments shall refer to the departments directly engaged in the labor or production and sale of the products.