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The best cost allocation system depends of the production process of the company.The cost allocations system should reflect all the singularities of the production process.
Activity Based Costing is the best cost allocation system now adays
activity based costing because in this system costs is allocated according to value added to the product
Activity based cost allocation method
Step down method of allocation
The best way or core components of a cost allocation system consist of a way to track which organizations provides a product and/or service.
Reciprocal method is the best method for cost allocation.
FIFO ( First in first out ) is the best but now a days the average cost method is populated mostly.
