what is the meaning of assignment cost

What is Cost Assignment?

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Cost assignment.

Cost assignment is the process of associating costs with cost objects, such as products, services, departments, or projects. It encompasses the identification, measurement, and allocation of both direct and indirect costs to ensure a comprehensive understanding of the resources consumed by various cost objects within an organization. Cost assignment is a crucial aspect of cost accounting and management accounting, as it helps organizations make informed decisions about pricing, resource allocation, budgeting, and performance evaluation.

There are two main components of cost assignment:

• Direct cost assignment: Direct costs are those costs that can be specifically traced or identified with a particular cost object. Examples of direct costs include direct materials, such as raw materials used in manufacturing a product, and direct labor, such as the wages paid to workers directly involved in producing a product or providing a service. Direct cost assignment involves linking these costs directly to the relevant cost objects, typically through invoices, timesheets, or other documentation.
• Indirect cost assignment (Cost allocation): Indirect costs, also known as overhead or shared costs, are those costs that cannot be directly traced to a specific cost object or are not economically feasible to trace directly. Examples of indirect costs include rent, utilities, depreciation, insurance, and administrative expenses. Since indirect costs cannot be assigned directly to cost objects, organizations use various cost allocation methods to distribute these costs in a systematic and rational manner. Some common cost allocation methods include direct allocation, step-down allocation, reciprocal allocation, and activity-based costing (ABC).

In summary, cost assignment is the process of associating both direct and indirect costs with cost objects, such as products, services, departments, or projects. It plays a critical role in cost accounting and management accounting by providing organizations with the necessary information to make informed decisions about pricing, resource allocation, budgeting, and performance evaluation.

Example of Cost Assignment

Let’s consider an example of cost assignment at a bakery called “BreadHeaven” that produces two types of bread: white bread and whole wheat bread.

BreadHeaven incurs various direct and indirect costs to produce the bread. Here’s how the company would assign these costs to the two types of bread:

• Direct cost assignment:

Direct costs can be specifically traced to each type of bread. In this case, the direct costs include:

• Direct materials: BreadHeaven purchases flour, yeast, salt, and other ingredients required to make the bread. The cost of these ingredients can be directly traced to each type of bread.
• Direct labor: BreadHeaven employs bakers who are directly involved in making the bread. The wages paid to these bakers can be directly traced to each type of bread based on the time spent working on each bread type.

For example, if BreadHeaven spent $2,000 on direct materials and $1,500 on direct labor for white bread, and $3,000 on direct materials and $2,500 on direct labor for whole wheat bread, these costs would be directly assigned to each bread type.

• Indirect cost assignment (Cost allocation):

Indirect costs, such as rent, utilities, equipment maintenance, and administrative expenses, cannot be directly traced to each type of bread. BreadHeaven uses a cost allocation method to assign these costs to the two types of bread.

Suppose the total indirect costs for the month are $6,000. BreadHeaven decides to use the number of loaves produced as the allocation base , as it believes that indirect costs are driven by the production volume. During the month, the bakery produces 3,000 loaves of white bread and 2,000 loaves of whole wheat bread, totaling 5,000 loaves.

The allocation rate per loaf is:

Allocation Rate = Total Indirect Costs / Total Loaves Allocation Rate = $6,000 / 5,000 loaves = $1.20 per loaf

BreadHeaven allocates the indirect costs to each type of bread using the allocation rate and the number of loaves produced:

• White bread: 3,000 loaves × $1.20 per loaf = $3,600
• Whole wheat bread: 2,000 loaves × $1.20 per loaf = $2,400

After completing the cost assignment, BreadHeaven can determine the total costs for each type of bread:

• White bread: $2,000 (direct materials) + $1,500 (direct labor) + $3,600 (indirect costs) = $7,100
• Whole wheat bread: $3,000 (direct materials) + $2,500 (direct labor) + $2,400 (indirect costs) = $7,900

By assigning both direct and indirect costs to each type of bread, BreadHeaven gains a better understanding of the full cost of producing each bread type, which can inform pricing decisions, resource allocation, and performance evaluation.

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What Is Cost Allocation?

Table of Contents

For your business to make money, you must charge prices that not only cover your expenses, but also provide a profit. Cost allocation is the process of identifying and assigning costs to the cost objects in your business, such as products, a project, or even an entire department or individual company branch.

While a detailed cost allocation report may not be vital for extremely small businesses, such as a teen’s lawn service, more complex businesses require the process of cost allocation to ensure profitability and productivity.

In short, if you can assign a cost to any part of your business, it’s considered a cost object.

What is cost allocation?

Cost allocation is the method business owners use to calculate profitability for the purpose of financial reporting . To ensure the business’s finances are on track, costs are separated, or allocated, into different categories based on the area of the business they impact.

For instance, cost allocation for a small clothing boutique would include the costs of materials, shipping and marketing. Calculating these costs consistently would help the store owner ensure that profits from sales are higher than the costs of owning and running the store. If not, the owner could easily pinpoint where to raise prices or cut expenses .

For a larger company, this process would be applied to each department or individual location. Many companies use cost allocation to determine which areas receive bonuses annually.

Regardless of your business size, you’ll want to review and choose the best accounting software to help this process run as smoothly as possible.

Types of costs

In the boutique example above, the process of cost allocation is pretty simple. For larger businesses, however, many more costs are involved. These costs break down into seven categories.

• Direct costs: These expenses are directly related to a product or service. In your business’s financial statements, these costs can be linked to items sold. For a small clothing store, this might include the cost of inventory.
• Direct labor: This cost category includes expenses directly related to the employee production of items or services your business sells. Direct labor costs include payroll for employees involved in making the items your business sells.
• Direct materials: As the name suggests, this category includes costs related to the resources used to manufacture a finished product. Direct materials include fabric to make clothing, or the glass used in building tables.
• Indirect costs: These expenses are not directly related to a product or service, but necessary to create the product or service. Indirect costs include payroll for those who work in operations. It also lists costs for materials you use in such small quantities that their costs are easy to overlook.
• Manufacturing overhead: This category includes warehouse costs, and any other expenses directly related to manufacturing the products sold. Manufacturing overhead costs include payroll for warehouse managers, as well as warehouse expenses such as rent and utilities.
• Overhead costs: These include expenses that support the company as a whole but are not directly related to production. Some examples of overhead costs are marketing, operations and utilities for a storefront.
• Product costs: Also called “manufacturing costs” or “total costs,” this category includes expenses for making or acquiring the product you sell. All manufacturing overhead costs are also listed in this category.

Example of cost allocation

To better explain the process of cost allocation and why it’s necessary for businesses, let’s look at an example.

Dave owns a business that manufactures eyeglasses. In January, Dave’s overhead costs totaled $5,000. In the same month, he produced 3,000 eyeglasses with $2 in direct labor per product. Direct materials for each pair of eyeglasses totaled $5.

Here’s what cost allocation would look like for Dave:

Overhead: $5,000 ÷ $3,000 = $1.66 per pair

Direct costs:

• Direct materials: $5 per pair
• Direct labor: $2 per pair
• Overhead: $1.66 per pair
• Total cost: $8.66 per pair

As you can see, without cost allocation, Dave would not have made a profit from his sales. Larger companies would apply this same process to each department and product to ensure sufficient sales goals. [Read related article: How to Set Achievable Business Goals ]

How to allocate costs

Cost objects vary by business type. The cost allocation process, however, consists of the same steps regardless of what your company produces.

1. Identify cost objects.

To begin allocating costs, you’ll need to list the cost objects of your business. Remember that anything within your business that generates an expense is a cost object. Review each product line, project and department to ensure you’ve gathered all cost objects.

2. Create a cost pool.

Next, gather a detailed list of all business costs. It’s a good idea to categorize the costs based on the reason for each amount. Categories should cover utilities, insurance , square footage and any other expenses your business incurs.

3. Allocate costs.

Now that you’ve listed cost objects and created a cost pool, you’re ready to allocate costs. As demonstrated in the example above, add up the costs of each cost object. At a glance, your report should justify all expenses related to your business. If costs don’t add up correctly, use the list to determine where you can make adjustments to get back on track.

What is cost allocation used for?

Cost allocation is used for many reasons, both externally and internally. Reports created by this process are great resources for making business decisions , monitoring productivity and justifying expenses.

External reports are usually calculated based on generally accepted accounting principles (GAAP) . Under GAAP, expenses can only be reported in financial statements during the time period the associated revenue is earned. For this reason, overhead costs are divided and allocated to individual inventory items. When the inventory is sold, the overhead is expensed as a portion of the cost of goods sold (COGS) .

Internal financial data, on the other hand, is usually reported using activity-based costing (ABC). This method assigns all products to the overhead expenses they caused. This process may not include all overhead costs related to operations and manufacturing.

Cost allocation reports show which cost objects incur the most expenses for your business and which products or departments are most profitable. These findings can be a great resource to pair with employee monitoring software when evaluating productivity. If you determine that a cost object is not as profitable as it should be, you should do further evaluations on productivity. If another cost object is found to exceed expectations, you can use the report to find staff members who deserve recognition for their contributions to the company.

Recognition is one of the best ways to keep employees motivated .

What is a cost driver?

A cost driver is a variable that can change the costs related to a business activity. The number of invoices issued, the number of employee hours worked, and the total of purchase orders are all examples of cost drivers in cost accounting .

While cost objects are related to the specific process or product incurring the costs, a cost driver sheds light on the reason for the incurred cost amounts. These items can take different forms – including fixed costs, such as the initial fees during the startup phase . Cost drivers give a bird’s-eye view of the entire company and how each department operates.

It’s common for only one cost driver to be used with very small businesses , since they are focused on using minimal reporting to estimate overhead costs.

Benefits of cost allocation

• It simplifies decision-making. Cost allocation gives you a detailed overview of how your business expenses are used. From this perspective, you can determine which products and services are profitable, and which departments are most productive.
• It assists in staff evaluation. You can also use cost allocation to assess the performance of different departments. If a department is not profitable, the staff productivity may need improvement. Cost allocation can also be an indicator of departments that exceed expectations and deserve recognition. Awards and recognition are a great way to motivate staff and, in turn, increase productivity. [Read related article: Best Business Productivity Apps ]

Even if you operate a very small business, it’s a great idea to learn the process of cost allocation, especially if you anticipate expansion in the future. Since the method can be complex, it’s ideal to use accounting software as an aid. Whether you choose to start allocating costs on your own with software or hire a professional accountant , it’s a process no business owner can afford to overlook.

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Module 5: Job Order Costing

Introduction to accumulating and assigning costs, what you will learn to do: assign costs to jobs.

Financial and managerial accountants record costs of production in an account called Work in Process. The total of these direct materials, direct labor, and factory overhead costs equal the cost of producing the item.

In order to understand the accounting process, here is a quick review of how financial accountants record transactions:

Let’s take as simple an example as possible. Jackie Ma has decided to make high-end custom skateboards. She starts her business on July 1 by filing the proper forms with the state and then opening a checking account in the name of her new business, MaBoards. She transfers $150,000 from her retirement account into the business account and records it in a journal as follows:

For purposes of this ongoing example, we’ll ignore pennies and dollar signs, and we’ll also ignore selling, general, and administrative costs.

After Jackie writes the journal entry, she posts it to a ledger that currently has only two accounts: Checking Account, and Owner’s Capital.

Debits are entries on the left side of the account, and credits are entries on the right side.

Here is a quick review of debits and credits:

You can view the transcript for “Colin Dodds – Debit Credit Theory (Accounting Rap Song)” here (opens in new window) .

Also, this system of debits and credits is based on the following accounting equation:

Assets = Liabilities + Equity.

• Assets are resources that the company owns
• Liabilities are debts
• Equity is the amount of assets left over after all debts are paid

Let’s look at one more initial transaction before we dive into recording and accumulating direct costs such as materials and labor.

Jackie finds the perfect building for her new business; an old woodworking shop that has most of the equipment she will need. She writes a check from her new business account in the amount of $2,500 for July rent. Because she took managerial accounting in college, she determines this to be an indirect product expense, so she records it as Factory Overhead following a three-step process:

• Analyze transaction

Because her entire facility is devoted to production, she determines that the rent expense is factory overhead.

2. Journalize transaction using debits and credits

If she is using QuickBooks ® or other accounting software, when she enters the transaction into the system, the software will create the journal entry. In any case, whether she does it by hand or computer, the entry will look much like this:

3. Post to the ledger

Again, her computer software will post the journal entry to the ledger, but we will follow this example using a visual system accountants call T-accounts. The T-account is an abbreviated ledger. Click here to view a more detailed example of a ledger .

Jackie posts her journal entry to the ledger (T-accounts here).

She now has three accounts: Checking Account, Owner’s Capital, and Factory Overhead, and the company ledger looks like this:

In a retail business, rent, salaries, insurance, and other operating costs are categorized into accounts classified as expenses. In a manufacturing business, some costs are classified as product costs while others are classified as period costs (selling, general, and administrative).

We’ll treat factory overhead as an expense for now, which is ultimately a sub-category of Owner’s Equity, so our accounting equation now looks like this:

Assets = Liabilities + Owner’s Equity

147,500 = 150,000 – 2,500

Notice that debits offset credits and vice versa. The balance in the checking account is the original deposit of $150,000, less the check written for $2,500. Once the check clears, if Jackie checks her account online, she’ll see that her ledger balance and the balance the bank reports will be the same.

Here is a summary of the rules of debits and credits:

Assets = increased by a debit, decreased by a credit

Liabilities = increased by a credit, decreased by a debit

Owner’s Equity = increased by a credit, decreased by a debit

Revenues increase owner’s equity, therefore an individual revenue account is increased by a credit, decreased by a debit

Expenses decrease owner’s equity, therefore an individual expense account is increased by a debit, decreased by a credit

Here’s Colin Dodds’s Accounting Rap Song again to help you remember the rules of debits and credits:

Let’s continue to explore job costing now by using this accounting system to assign and accumulate direct and indirect costs for each project.

When you are done with this section, you will be able to:

• Record direct materials and direct labor for a job
• Record allocated manufacturing overhead
• Prepare a job cost record

Learning Activities

The learning activities for this section include the following:

• Reading: Direct Costs
• Self Check: Direct Costs
• Reading: Allocated Overhead
• Self Check: Allocated Overhead
• Reading: Subsidiary Ledgers and Records
• Self Check: Subsidiary Ledgers and Records
• Introduction to Accumulating and Assigning Costs. Authored by : Joseph Cooke. Provided by : Lumen Learning. License : CC BY: Attribution
• Colin Dodds - Debit Credit Theory (Accounting Rap Song). Authored by : Mr. Colin Dodds. Located at : https://youtu.be/j71Kmxv7smk . License : All Rights Reserved . License Terms : Standard YouTube License
• What the General Ledger Can Tell You About Your Business. Authored by : Mary Girsch-Bock. Located at : https://www.fool.com/the-blueprint/general-ledger/ . License : All Rights Reserved . License Terms : Standard YouTube License

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What is Cost Allocation? Definition & Process

Jul 16, 2020 Michael Whitmire

Working with the former accountants now working at FloQast, we decided to take a look at some of the pillars of the accounting professions.

The key to running a profitable enterprise of any kind is making sure that your prices are high enough to cover all your costs — and leave at least a bit for profit. For a really simple business — like the proverbial lemonade stand that almost every kid ran — that’s pretty simple. Your costs are what you (or your parents) paid for lemons and sugar. But what if it’s a more complex business? Then you might need to brush up on cost accounting, and learn about allocation accounting . Let’s walk through this using the hypothetical company, Lisa’s Luscious Lemonade. 

What is cost allocation ?

The cost allocation definition is best described as the process of assigning costs to the things that benefit from those costs or to cost centers . For Lisa’s Luscious Lemonade, a cost center can be as granular as each jug of lemonade that’s produced, or as broad as the manufacturing plant in Houston. 

Let’s assume that the owner, Lisa, needs to know the cost of a jug of lemonade. The total cost to create that jug of lemonade isn’t just the costs of the water, lemons, sugar and the jug itself, but also includes all the allocated costs to make it. 

Let’s start by defining some terms…

Direct costs are costs that can be traced directly to the product or service itself. For manufacturers, these consist of direct materials and direct labor. They appear in the financial statements as part of the cost of goods sold .

Direct materials are those that become an integral part of the finished product. This will be the costs of the water, sugar, lemons, the plastic jug, and the label. 

Direct labor includes the labor costs that can be easily traced to the production of those finished products. Direct labor for that jug will be the payroll for the workers on the production line. 

Indirect costs are the costs that can’t be easily traced to a product or service but are clearly required for making whatever an enterprise sells. This includes materials that are used in such insignificant quantities that it’s not worth tracing them to finished products, and labor for employees who work in the factory, but not on the production line. 

Overhead costs encompass all the costs that support the enterprise that can’t be directly linked to making the items that are sold. This includes indirect costs , as well as selling, marketing, administration, and facility costs. 

Manufacturing overhead includes the overhead costs that are directly related to making the products for sale. This includes the electricity, rent, and utilities for the factory and salaries of supervisors on the factory floor. 

Product costs are all the costs in making or acquiring the product for sale. These are also known as manufacturing costs or total costs . This includes direct labor, direct materials, and allocated manufacturing overhead. 

What is the process?

The first step in any cost allocation system is to identify the cost objects to which costs need to be allocated. Here, our cost objec t is a jug of lemonade. For a more complex organization, the cost object could be a product line, a department, or a branch. 

Direct costs are the simplest to allocate. Last month, Lisa’s Luscious Lemonades produced 50,000 gallons of lemonade and had the following direct costs:

                                    Total costs     Cost per gallon Direct materials        $142,500               $2.85 Direct labor                   $37,500                   $.75

How are costs allocated?

Allocating overhead costs is a bit more complex. First, the overhead costs are split between manufacturing costs and non-manufacturing costs. Some of this is pretty straightforward: the factory floor supervisor’s salary is clearly a manufacturing cost, and the sales manager’s salary is a non-manufacturing cost. But what about the cost of human resources or other service departments that serve all parts of the organization? Or facilities costs, which might include the rent for the building, insurance, utilities, janitorial services, and general building maintenance?

Human resources and other services costs might be logically split based on the headcount of the manufacturing versus non-manufacturing parts of the business. Facilities costs might be split based on the square footage of the manufacturing space versus the administrative offices. Electricity usage might be allocated on the basis of square footage or machine hours , depending on the situation. 

Let’s say that for Lisa’s Luscious Lemonades, after we split the overhead between manufacturing and non-manufacturing costs, we have the following annual manufacturing overhead costs : 

Supervisor salary                                  $84,000 Indirect costs                                         $95,000 Facility costs                                           $150,000 Human resources                                  $54,000 Depreciation                                          $65,000 Electricity                                                $74,000 Total manufacturing overhead             $522,000

In a perfect world, it would be possible to keep an accurate running total of all overhead costs so that management would have detailed and accurate cost information. However, in practice, a predetermined overhead rate is used to allocate overhead using an allocation base . 

This overhead rate is determined by dividing the total estimated manufacturing overhead by the estimated total units in the allocation base . At the end of the year or quarter, the allocated costs are reconciled to actual costs. 

Ideally, the allocation base should be a cost driver that causes those overhead costs . For manufacturers, direct labor hours or machine-hours are commonly used. Since Lisa only makes one product — gallon jugs of lemonade — the simplest cost driver is the number of jugs produced in a year. 

If we estimate that 600,000 gallons of lemonade are produced in a year, then the overhead rate will be $522,000 / 600,000 = $.87 per gallon.

Our final cost to produce a gallon of Lisa’s Luscious Lemonade is as follows:

Direct materials                             $2.85 Direct labor                                     $0.75 Manufacturing overhead               $0.87 Total cost                                         $4.47

What is cost allocation used for?

Cost allocation is used for both external reporting and internally for decision making. Under generally accepted accounting principles (GAAP), the matching principle requires that expenses be reported in the financial statements in the same period that the related revenue is earned. 

This means that manufacturing overhead costs cannot be expensed in the period incurred, but must be allocated to inventory items, where those costs remain until the inventory is sold, when overhead is finally expensed as part of the cost of goods sold. For Lisa’s Luscious Lemonade, that means that every time a jug of lemonade is produced, another $4.47 goes into inventory. When a jug is sold, $4.47 goes to the cost of goods sold. 

However, for internal decision-making, the cost allocation systems used for GAAP financials aren’t always helpful. Cost accountants often use activity-based costing , or ABC, in parallel with the cost allocation system used for external financial reporting . 

In ABC, products are assigned all of the overhead costs that they can reasonably be assumed to have caused. This may include some — but not all — of the manufacturing overhead costs , as well as operating expenses that aren’t typically assigned to products under the costing systems used for GAAP. 

AutoRec to keep you sane

Whatever cost accounting method you use, it’s going to require spreadsheets that you have to reconcile to the GL. Combine that with the other reconciliations you have to do to close out the books, and like Lisa’s controller, you might be ready to jump into a vat of lemonade to drown your sorrows. 

Enter FloQast AutoRec. Rather than spend hours every month reconciling accounts, AutoRec leverages AI to match one-to-one, one-to-many, or many-to-many transactions in minutes. Simple set up means you can start using it in minutes because you don’t need to create or maintain rules. Try it out, and see how much time you can save this month. 

Ready to find out more about how FloQast can help you tame the beast of the close?

Michael Whitmire

As CEO and Co-Founder, Mike leads FloQast’s corporate vision, strategy and execution. Prior to founding FloQast, he managed the accounting team at Cornerstone OnDemand, a SaaS company in Los Angeles. He began his career at Ernst & Young in Los Angeles where he performed public company audits, opening balance sheet audits, cash to GAAP restatements, compilation reviews, international reporting, merger and acquisition audits and SOX compliance testing. He holds a Bachelor’s degree in Accounting from Syracuse University.

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COST ASSIGNMENT Definition

COST ASSIGNMENT involves assigning costs of an account to the accounts that are responsible or accountable for incurring the cost. For example, the cost of issuing purchase orders is allocated to the various objects procured. The cost assignment is done through assignment paths and cost drivers. The assignment path identifies the source account (the account whose cost is being assigned "Issue Purchase Orders" in the above example) and destination accounts (the accounts to which the costs are being allocated the various cost objects procured by issuing purchase orders in the above example). The cost driver identifies the measure or rationale on the basis of which the assignment needs to be done, that is, whether the costs of issuing purchase orders need to be assigned to various cost objects evenly, based on some defined percentage values, or based on some criterion, like the number of purchase orders of each cost object issued. Defining the cost drivers and assignment paths (i.e., source and destination accounts) enable proper assignment and accounting of the various costs incurred in the organization.

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• Cost Classifications
• Relevant Cost of Material
• Manufacturing Overhead Costs
• Conversion Costs
• Quality Costs
• Revenue Expenditure
• Product Cost vs Period Cost
• Direct Costs and Indirect Costs
• Prime Costs and Conversion Costs
• Relevant vs Irrelevant Costs
• Avoidable and Unavoidable Costs
• Cost Allocation
• Joint Products
• Accounting for Joint Costs
• Service Department Cost Allocation
• Repeated Distribution Method
• Simultaneous Equation Method
• Specific Order of Closing Method
• Direct Allocation Method

Cost allocation is the process by which the indirect costs are distributed among different cost objects such as a project, a department, a branch, a customer, etc. It involves identifying the cost object, identifying and accumulating the costs that are incurred and assigning them to the cost object on some reasonable basis.

Cost allocation is important for both pricing and planning and control decisions. If costs are not accurately calculated, a business might never know which products are making money and which ones are losing money. If cost are mis-allocated, a business may be charging wrong price to its customers and/or it might be wasting resources on products that are wrongly categorized as profitable.

Cost allocation is a sub-process of cost assignment , which is the overall process of finding total cost of a cost object. Cost assignment involves both cost tracing and cost allocation. Cost tracing encompasses finding direct costs of a cost object while the cost allocation is concerned with indirect cost charge.

Steps in cost allocation process

Typical cost allocation mechanism involves:

• Identifying the object to which the costs have to be assigned,
• Accumulating the costs in different pools,
• Identifying the most appropriate basis/method for allocating the cost.

Cost object

A cost object is an item for which a business need to separately estimate cost.

Examples of cost object include a branch, a product line, a service line, a customer, a department, a brand, a project, etc.

A cost pool is the account head in which costs are accumulated for further assignment to cost objects.

Examples of cost pools include factory rent, insurance, machine maintenance cost, factory fuel, etc. Selection of cost pool depends on the cost allocation base used. For example if a company uses just one allocation base say direct labor hours, it might use a broad cost pool such as fixed manufacturing overheads. However, if it uses more specific cost allocation bases, for example labor hours, machine hours, etc. it might define narrower cost pools.

Cost driver

A cost driver is any variable that ‘drives’ some cost. If increase or decrease in a variable causes an increase or decrease is a cost that variable is a cost driver for that cost.

Examples of cost driver include:

• Number of payments processed can be a good cost driver for salaries of Accounts Payable section of accounting department,
• Number of purchase orders can be a good cost driver for cost of purchasing department,
• Number of invoices sent can be a good cost driver for cost of billing department,
• Number of units shipped can be a good cost driver for cost of distribution department, etc.

While direct costs are easily traced to cost objects, indirect costs are allocated using some systematic approach.

Cost allocation base

Cost allocation base is the variable that is used for allocating/assigning costs in different cost pools to different cost objects. A good cost allocation base is something which is an appropriate cost driver for a particular cost pool.

T2F is a university café owned an operated by a student. While it has plans for expansion it currently offers two products: (a) tea & coffee and (b) shakes. It employs 2 people: Mr. A, who looks after tea & coffee and Mr. B who prepares and serves shakes & desserts.

Its costs for the first quarter are as follows:

Total tea and coffee sales and shakes sales were $50,000 & $60,000 respectively. Number of customers who ordered tea or coffee were 10,000 while those ordering shakes were 8,000.

The owner is interested in finding out which product performed better.

Salaries of Mr. A & B and direct materials consumed are direct costs which do not need any allocation. They are traced directly to the products. The rest of the costs are indirect costs and need some basis for allocation.

Cost objects in this situation are the products: hot beverages (i.e. tea & coffee) & shakes. Cost pools include rent, electricity, music, internet and wi-fi subscription and magazines.

Appropriate cost drivers for the indirect costs are as follows:

Since number of customers is a good cost driver for almost all the costs, the costs can be accumulated together to form one cost pool called manufacturing overheads. This would simply the cost allocation.

Total manufacturing overheads for the first quarter are $19,700. Total number of customers who ordered either product are 18,000. This gives us a cost allocation base of $1.1 per customer ($19,700/18,000).

A detailed cost assignment is as follows:

Manufacturing overheads allocated to Tea & Cofee = $1.1×10,000

Manufacturing overheads allocated to Shakes = $1.1×8,000

by Irfanullah Jan, ACCA and last modified on Jul 22, 2020

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Assignment Method: Examples of How Resources Are Allocated

What Is the Assignment Method?

The assignment method is a way of allocating organizational resources in which each resource is assigned to a particular task. The resource could be monetary, personnel , or technological.

Understanding the Assignment Method

The assignment method is used to determine what resources are assigned to which department, machine, or center of operation in the production process. The goal is to assign resources in such a way to enhance production efficiency, control costs, and maximize profits.

The assignment method has various applications in maximizing resources, including:

• Allocating the proper number of employees to a machine or task
• Allocating a machine or a manufacturing plant and the number of jobs that a given machine or factory can produce
• Assigning a number of salespersons to a given territory or territories
• Assigning new computers, laptops, and other expensive high-tech devices to the areas that need them the most while lower priority departments would get the older models

Companies can make budgeting decisions using the assignment method since it can help determine the amount of capital or money needed for each area of the company. Allocating money or resources can be done by analyzing the past performance of an employee, project, or department to determine the most efficient approach.

Regardless of the resource being allocated or the task to be accomplished, the goal is to assign resources to maximize the profit produced by the task or project.

Example of Assignment Method

A bank is allocating its sales force to grow its mortgage lending business. The bank has over 50 branches in New York but only ten in Chicago. Each branch has a staff that is used to bring in new clients.

The bank's management team decides to perform an analysis using the assignment method to determine where their newly-hired salespeople should be allocated. Given the past performance results in the Chicago area, the bank has produced fewer new clients than in New York. The fewer new clients are the result of having a small market presence in Chicago.

As a result, the management decides to allocate the new hires to the New York region, where it has a greater market share to maximize new client growth and, ultimately, revenue.

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Know the Differences & Comparisons

Difference Between Cost Allocation and Cost Apportionment

Based on the relation of the cost item with the cost center or unit, to which it is imposed, the cost item is allocated or apportioned and not as per the nature of the expense.

Take a read of this article excerpt, in which you can find the fundamental differences between allocation and apportionment of cost.

Content: Cost Allocation Vs Cost Apportionment

Comparison chart, definition of cost allocation.

Cost Allocation, as the name suggest, is the direct allotment of cost to the traceable cost object. It is the process of associating the expenses incurred, to different departments of the organization.

When a particular cost item is easily recognizable with a cost unit, i.e. product, or cost center, then these costs are charged to the concerned cost center or unit, and the process is called as cost allocation. In finer terms, it is the full-fledged distribution of an overhead item to the department, rationally.

Therefore, a process, in which there is an outright charging of whole cost items to the concerned cost center, is termed as cost allocation. The two factors responsible for cost allocation are:

• Respective cost unit or cost center, causing the overhead to be incurred.
• Definite amount of cost is to be calculated.

For instance : Salary paid to the employees of the maintenance department, can be allocated to that department.

Definition of Cost Apportionment

When the cost items cannot be outrightly charged to or accurately traceable to a particular cost center, then such items of cost are prorated amongst various cost objects, on an equitable basis, this process is known as cost apportionment. It is the distribution of different items of cost in proportions to the cost unit or cost center on a suitable basis.

In simple terms, the expenses which are unallowable are dispersed over multiple departments, is known as apportionment.

For instance : Wages paid to the head of the factory, rent of factory, electricity, etc. cannot be charged to a particular department, then these can be apportioned amongst various departments.

The basis for apportionment of costs is determined after proper examination of the relationship between the base and different variables. It is important to predetermine an appropriate basis for apportionment, which guarantees the equitable share of common overheads for the departments. The basis should be periodically reviewed, to improve the accuracy. It is based on the principles of:

• Service Rendered
• Survey or Analysis Method
• Ability to bear

Key Differences Between Cost Allocation and Cost Apportionment

The difference between cost allocation and cost apportionment can be drawn clearly on the following grounds:

• Allocation of cost means a process in which the entire amount of overhead is charged to a specific cost center. On the contrary, Apportionment of cost can be understood as the distribution of proportions of cost items to the cost unit, i.e. product or service or the cost center.
• Allocation of the cost is possible only when the cost is recognized as particularly imputable to a specific cost center. Conversely, apportionment of the cost is needed when the cost cannot be allocated to a particular cost center. Instead, the cost is shared by two or more cost centers, as per the expected benefit received.
• As allocation of overhead is a sheer process of departmentalization of expenses, the overheads are directly assigned to the department. In contrast, cost apportionment involves the proportionate distribution of cost to different departments, on a reasonable basis.
• Cost allocation is applied when the overhead is associated with a particular department. As against this, cost apportionment is applied when the overhead is related to various departments.

Both allocation and apportionment of cost aim at identifying and assigning the cost to the cost center, but they are different. Cost Allocation is the process of assignment of cost item to the cost object, which is directly traceable. On the other hand, cost apportionment is for those indirect cost items, which are leftover in the process of cost allocation.

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Understanding Global Assignment Costs

By LaQuita Morrison, GMS

Confidence in the U.S. economy is rising, and with it, the number of companies seeking to establish, strengthen or expand their global positions is increasing. Often, this involves expatriating talent to fill key positions in other countries. Some companies will also provide global assignment opportunities to expand their employees’ knowledge and skills.

Whether your company is well versed or new to managing global assignments, the cost of them can be daunting. However, when appropriately managed, global assignments can positively impact a company’s global business goals.

Sending an employee and a family of three on a three-year global assignment could cost in excess of USD $1 million. So, it’s not surprising that many global companies believe traditional overseas assignments are cost-prohibitive. Some companies have reduced, frozen or even eliminated their global assignment programs. However, to remain competitive, companies still need to place the best talent at the appropriate locations, and often that talent isn’t available without a global transfer. This is when the proper management and oversight of relocation costs becomes imperative.

Understanding the Costs

If you’re planning global assignments, there are ways to scale back costs without compromising operations or impacting employee productivity. Finding that balance between employee support and cost management to successfully oversee global assignments is a challenge, but it can be done. Below is a list of some of the expenses associated with a global assignment:

• Candidate Assessment – Conducted by the company to determine if the employee is the right candidate for the global assignment.
• Pre-Decision Assessment – Aligns the individual needs of the employee and the employee’s family with the business goals of the assignment.
• Immigration – Obtaining the appropriate documentation for the assignment. The reason for the assignment will dictate the appropriate visa type.
• Tax Implications – Determining the tax implications of the assignment and responsibilities of both the company and the employee.
• Tax Assistance – Providing the employee with tax assistance, which could include consultation; preparation (for both home and host countries); filing (for both home and host countries); tax equalization.
• Host Country Housing – Providing reasonable and customary rent and utility costs for the employee’s housing in the host country according to regional guidelines based on family size and location.
• Cost-of-Living Allowance (COLA) – An allowance or differential paid to the employee for similar goods and services in the host location that they have in the home location based on family size and salary. Intended to cover costs to purchase host country goods and services over those from the home country.
• Transportation – An allowance for a car for the duration of the assignment, the amount of which may vary by location and family size.
• Hardship – An allowance paid in addition to salary and COLA for assignments in locations designated as a hardship for the employee based on factors that include potential violence, incidence of disease, medical care quality, geographic isolation and availability of goods and services.
• Miscellaneous Expense Allowance – One-time payment made, separate from base salary, intended to cover expenses not expressly covered in the Letter of Understanding, like renter’s insurance, obtaining a new driver’s license, immunizations, taxis, etc.
• Cultural/Language Training – Provided to the employee and the family to assist in understanding the host country culture and language.
• Home Finding and Destination Services – Locating housing in the host country, as well as registering with local authorities and setting up accounts.
• Departure Services – Home sale, property management, lease termination, etc.
• Global Household Goods – Transporting (via land, air and/or sea) or storing household goods and personal effects.
• Temporary Living – Fully furnished housing at the destination location.
• Repatriation – Return of the employee to the home country following assignment completion.

To learn more about managing global assignment costs, download our free guide.

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What is an executive relocation package, how to build an effective hr communication strategy, should your relocation package include hardship allowances, 8 benefits of outsourcing your relocation program.

Assignment Problem: Meaning, Methods and Variations | Operations Research

After reading this article you will learn about:- 1. Meaning of Assignment Problem 2. Definition of Assignment Problem 3. Mathematical Formulation 4. Hungarian Method 5. Variations.

Meaning of Assignment Problem:

An assignment problem is a particular case of transportation problem where the objective is to assign a number of resources to an equal number of activities so as to minimise total cost or maximize total profit of allocation.

The problem of assignment arises because available resources such as men, machines etc. have varying degrees of efficiency for performing different activities, therefore, cost, profit or loss of performing the different activities is different.

Thus, the problem is “How should the assignments be made so as to optimize the given objective”. Some of the problem where the assignment technique may be useful are assignment of workers to machines, salesman to different sales areas.

Definition of Assignment Problem:

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Suppose there are n jobs to be performed and n persons are available for doing these jobs. Assume that each person can do each job at a term, though with varying degree of efficiency, let c ij be the cost if the i-th person is assigned to the j-th job. The problem is to find an assignment (which job should be assigned to which person one on-one basis) So that the total cost of performing all jobs is minimum, problem of this kind are known as assignment problem.

The assignment problem can be stated in the form of n x n cost matrix C real members as given in the following table:

How do you calculate the cost of attendance?

While colleges provide the cost of attendance, these costs often vary from student to student, so it’s important to understand how much college will cost for you. In addition to the direct costs like tuition and fees, you can often find estimates for indirect expenses on college websites. These amounts can vary widely based on many factors, including your academic year, how far you live from college, and your extracurricular activities. Start by looking at estimates provided by the college and then factor in your anticipated expenses. Although indirect expenses can be challenging to predict, you should do your best to estimate what those costs may be and budget accordingly.

Why is the cost of attendance important?

The cost of attendance is the maximum amount you would pay for one year of college before financial aid is applied. Understanding the cost of attendance can help you put your financial aid into perspective and prepare for out-of-pocket costs.

Will I pay the full cost of attendance?

No. Most students will not pay the full cost of attendance. While the cost of attendance is an important number to understand, make sure to factor in the financial aid you’re receiving. The cost after financial aid has been applied is the amount that you and your family will have to pay out of pocket to attend college. Check out this article for more information about covering the remaining bill.

How much is tuition?

Tuition is the price colleges charge for classes. Students also pay other fees related to enrolling in and attending a college. The cost of tuition and fees varies by college.

There’s a wide range of prices, as the table below shows. Remember, many students receive grants and scholarships that offset college costs.

These numbers are based on published tuition costs, not what students actually end up paying out of their own pockets. There can be a big difference between those two numbers, thanks to financial aid.

What other expenses will I have?

In addition to tuition and fees, there are costs for housing, food, books and supplies, and transportation. Learn more about the five main categories of college costs .

Can I get help paying for college?

Yes. Most college students receive financial aid. This is money that is given or lent to you to help pay for college costs. There are several forms of financial aid:

• Grants and scholarships: money you do not have to repay
• Loans: money you do have to repay
• Work-study: a program that allows you to work part-time to earn money for college expenses

Students often use a combination of financial aid options to pay their college expenses. Read Financial Aid Can Help You Afford College to learn more. 

What will college really cost me?

Less than you think. The best way to determine what a particular college may really cost is to calculate your estimated net price for that college. The net price is an estimate of the actual cost you and your family need to pay in a year to cover education expenses for you to attend a particular college. It’s the college’s cost of attendance minus any grants and scholarships for which you may be eligible. The net price is usually far lower than the published price.

Is college worth the cost?

College has many benefits. For example, people who graduate from college earn more money and are more likely to hold a job than people who don’t graduate from college. Learn more about the value of college .

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Biden Wipes Out Another $7.4 Billion in Student Loan Debt

President Biden is hoping to shore up support with young voters who are disproportionately affected by soaring education costs. So far, he has canceled $153 billion in debt.

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By Zach Montague

Reporting from Washington

President Biden canceled $7.4 billion in student loan debt on Friday as he tries to shore up support with young voters who are disproportionately affected by soaring education costs, but who may be drifting away over his policy on Israel and the war in Gaza.

The latest round of relief is part of a strategy by the White House to take smaller, targeted actions for certain subsets of borrowers after the Supreme Court struck down a far more ambitious plan to wipe out $400 billion in debt last year.

Mr. Biden said this week that he would make another attempt at large-scale debt forgiveness for about 30 million people, despite Republican opposition and legal challenges. But in the meantime, he has been chipping away at student debt by fixing and streamlining existing programs that have been plagued by bureaucratic and other problems for years.

Friday’s announcement was the latest such move, affecting around 277,000 people. White House officials said those borrowers would be notified by email that day.

More than 200,000 of those who qualified had borrowed relatively small amounts originally — $12,000 or less — and have been making payments through the administration’s income-driven repayment plan , known as SAVE.

Others who will see relief include teachers, librarians, academics and public safety workers who have been making student loan payments for 10 years under the Public Service Loan Forgiveness program. Another 65,000 borrowers enrolled in other income-driven repayment plans will see adjustments reducing their debt, Mr. Cardona said.

So far, the Biden administration has forgiven $153 billion in debt for 4.3 million borrowers.

“We’ve approved help for roughly one out of 10 of the 43 million Americans who have federal student loans,” Miguel A. Cardona, the education secretary, told reporters.

Republicans in Congress characterize student debt relief as unfair to borrowers who struggled to pay off their student debt without assistance.

“You’re incentivizing people to not pay back student loans and at the same time penalizing and forcing people who did to subsidize those who didn’t,” Representative John Moolenaar, Republican of Michigan, said during a hearing on Wednesday, in which Mr. Cardona testified about the Education Department’s budget request for next year.

“I don’t see it as unfair. I see it as, we’re fixing something that’s broken,” Mr. Cardona said. “We have better repayment plans now so we don’t have to be in the business of forgiving loans in the future.”

On Monday, Mr. Biden outlined a new attempt to wipe out student loan debt on a larger scale, beyond the scope of the programs he has been relying on so far.

The new plan would reduce the amount that 25 million borrowers still owe on their undergraduate and graduate loans. It would wipe away the entire amount for more than four million Americans. Altogether, White House officials said, 10 million borrowers would see debt relief of $5,000 or more.

That plan must undergo a public comment period that stretches through the summer. It also must survive legal challenges.

The original plan relied on a law called the HEROES Act, which the administration argued allowed the government to waive student debt during a national emergency like the Covid pandemic. The Supreme Court disagreed.

Biden administration officials said because the new approach is based on a different law — the Higher Education Act — it is more likely to survive the expected challenges.

Zach Montague is based in Washington. He covers breaking news and developments around the district. More about Zach Montague

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As President Biden tours Pennsylvania , his campaign will run a new ad  promoting his commitment to organized labor and attacking the economic policies of former President Donald Trump.

Trump plans to meet with the right-wing president of Poland , the latest in a series of his private interactions with foreign leaders who share an affinity with his brand of politics.

Biden is expected to deny permission for a 211-mile industrial road through the Alaskan wilderness  to a large copper deposit, handing a victory to environmentalists in an election year when he wants to underscore his credentials as a climate leader.

Vice-Presidential Calculations: As Trump sifts through potential running mates, he has peppered some advisers and associates with a direct question: Which Republican could best help him raise money ?

Embracing the Jan. 6 Rioters:  Trump initially disavowed the attack on the Capitol, but he is now making it a centerpiece of his campaign .

Mobilizing the Left: Amid the war in Gaza, the pro-Palestinian movement has grown into a powerful, if disjointed, political force in the United States. Democrats are feeling the pressure .

On a Collision Course:  As president, Trump never trusted the intelligence community. His antipathy has only grown since he left office, with potentially serious implications should he return to power .

Average cost for child care in Ohio is more than $11K for an infant. How can state help?

Report: average annual cost of child care at an ohio center for a family with one infant is $11,438.

• For child care to be considered affordable, it has to cost 7% or less of a family's annual income
• Researchers say Ohio has seen a 36% drop in the number of child care workers in the state
• DeWine wants to create a voucher program that would support 8,000 children in Ohio

Ohio Gov. Mike DeWine announced two new initiatives to improve access to child care last week in his State of the State address.

Legislators and experts think the initiatives will help, but say Ohio has more to do to expand access.

The average cost of child care is unaffordable for many families in Ohio. Policy Matters Ohio, a nonprofit research institute, released a report on child care accessibility in March that found the average annual cost of child care at a center for a family with one infant is $11,438.

For child care to be considered affordable, it has to cost 7% or less of a family's annual income, according to the U.S. Department of Health and Human Services. Researchers found that expenses would have to be below $4,700 a year to be considered affordable based on the median household income in Ohio.

Researchers found that at current rates, an Ohio family would have to make $250,385 a year for child care for an infant and a toddler at the average center to be considered affordable.

Kathryn Poe, who co-authored the report, said people don't realize the impact child care expenses have on Ohioans in all economic classes.

"Often we still talk about it as giving child care assistance to just the poorest folks and only that. It can't be that way in order for this program to actually be successful and reach people. It has to be accessible for people who are solidly in the middle class in Ohio," they said.

Poe and co-author Alissa Smith found there's been a decline in the number of children benefiting from publicly funded child care, from 172,585 children in 2019 to 143,888 in 2021, the most recent data available.

They also found a decline in the number of child care workers by nearly 36% between 2017 and 2022, which experts say is in part because of low wages.

Kara Wente, director of the Ohio Department of Children and Youth , said at an Ohio Chamber of Commerce event on Tuesday that the average wage for a child care worker was $11.92 in 2019. That increased to $14.84 by the end of last year.

"You don't hear us celebrating that increase, because that's obviously not where anyone needs it to be. But at least we're starting to see the trend move in the right direction, which is reassuring," Wente said,

What did DeWine propose in the State of the State?

During his State of the State address last week, DeWine proposed a new child care voucher program for families that make up to 200% of the federal poverty level, which would be $60,000 for a family of four. The governor said the program will provide support for 8,000 children in Ohio.

Currently, only families that earn up to 145% of the federal poverty level are eligible for publicly funded child care, which would be a family of four with an income of up to $45,240.

DeWine also announced the state will allocate $85 million in federal funding to upgrade and expand child care facilities.

How much will the initiatives help?

Wente praised the governor for increasing eligibility from 130% to 145% of the federal poverty level during his time in office and said the voucher program will be a "pretty big deal" for the 8,000 children who benefit but that it's not enough.

"It doesn't put us in line with the other states. And the governor truly wants this to be the best place to raise a family and we know child care is a key component to that," she said.

Policy Matters Ohio researchers recommended expanding eligibility to up to 300% of the federal poverty level, which would assist Ohioans with a median household income of $65,720.

Wente said the voucher program will give the state more data for future policy decisions, as the data following the pandemic has. She said about 70% of the applications denied in 2020 were for families that met the requirements in that they were working or in school but were over the income threshold to qualify.

"That's really where we get to those families that are making those critical decisions around 'Do I continue to work? Or is today the day that one of us decides to stay home because we can't afford it?' Those are the families we're hoping to serve and support through this childcare voucher program," Wente said.

Alissa Smith with Policy Matters Ohio said while the voucher program is a step in the right direction, publicly funded child care needs a long-term change. She said what the state learns from the capacity grants about who's applying and where the money is needed will help.

How much will the child care vouchers cost?

Poe said any policy solution for making child care more accessible has to involve more funding.

"There's not an aspect of this issue that wouldn't be better with more money," Poe said.

The USA TODAY Network Ohio Bureau requested cost estimates for the publicly funded child care currently and the new voucher program from the Ohio Department of Children and Youth but did not receive a response before publication.

What will lawmakers do?

Senate President Matt Huffman, R-Lima, said after the governor's address he was pleased to hear DeWine talk about increasing access and that the conversation needs to focus on increasing capacity as there are fewer child care centers in Ohio now than there were a decade ago.

Senate Minority Leader Nickie Antonio, D-Lakewood, said if the Republican majority in the legislature could raise the eligibility threshold for school vouchers to 450% of the federal poverty level, the legislature should increase the eligibility for families receiving child care.

Rep. Andrea White, R-Kettering, and Rep. Bill Roemer, R-Richfield, introduced a bill to establish child care grant programs in the Ohio House of Representatives on April 10. The bill would allocate $10 million to the Department of Children and Youth to administer grants of up to $750,000 to increase child care availability.

What happens next?

New federal rules regarding child care take effect on April 30, although Ohio can request a two-year waiver for time to comply.

The new rules will require state agencies to pay providers based on enrollment rather than attendance, which would give providers more stability.

The rules will also require that copayments for families receiving publicly funded child care can be no more than 7% of the family's income.

Erin Glynn is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio .

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What Iran launched at Israel in its unprecedented attack, and what made it through the air defenses

By Haley Ott

Updated on: April 16, 2024 / 6:40 AM EDT / CBS News

Iran launched an unprecedented retaliatory attack on Israel over the weekend that included hundreds of missiles and drones launched primarily from its own soil, but also by Iran-backed groups in several other countries. Virtually everything fired at Israel was intercepted before entering the country's territory, according to the Israel Defense Forces, which reported "very little damage" from the attack.

A 7-year-old girl who was severely injured by shrapnel was the only known casualty in the attack. The child, from a Bedouin village in Israel's southern Negev desert, was still fighting for her life on Monday.

Iran's assault was designed to saturate Israeli and U.S. air defenses with drones and cruise missiles and clear the way for Iran's ballistic missiles, two U.S. officials told CBS News national security correspondent David Martin. It took several hours for the drones and missiles to travel toward Israel, and alerts began to sound across the country at about 2 a.m. local time on Sunday (7p.m. Eastern on Saturday).

• U.S. won't participate in Israeli reprisal attack on Iran, officials say

The IDF said 170 drones were fired at Israel from Iran, and Israeli Air Force jets shot down dozens of them. U.S. aircraft operating from bases in Saudi Arabia and Jordan shot down between 70 and 80 of the drones, Martin reported.

Iran's state news agency, IRNA, said its domestically built Shahed 131 and 136 drones were used in the attack, the larger of which have a range of around 1,200 miles.

Kheibar Shekan ballistic missiles and Emad ballistic missiles were also used in the attack, according to IRNA. Kheibar Shekan missiles, unveiled in 2022, are one of Iran's most modern ballistic missiles, IRNA said, and the Emad missiles can carry a payload of 1,600 pounds. The state news agency said the cruise missiles used in the attack were Paveh missiles, which it said were capable of attacking targets from multiple directions by taking varied paths.

The IDF said none of the 170 drones launched by Iran crossed into Israeli territory, nor did any of the more than 30 cruise missiles fired by the Islamic republic.

Of 120 ballistic missiles fired at Israel from Iran, the U.S. officials told CBS News only five got through Israeli and U.S. air defenses and hit Israeli territory. One U.S. official told CBS News that roughly half of the ballistic missiles failed on launch or crashed in flight.

Four missiles did hit Israel's Nevatim Air Base, where Israeli F-35s are based, the U.S. officials said, adding that the base was likely Iran's primary target, as it is believed to have been an Israeli F-35 that carried out a deadly strike on an Iranian consulate in Syria's capital on April 1. Iran's weekend attack was its promised retaliation for that Israeli strike in Damascus, which killed seven officers from Iran's Islamic Revolutionary Guard Corps, including two generals.

One of the missiles hit near the base's runway, while two landed in open areas and "one more hit near a building, causing minor damage," IDF spokesperson Daniel Hagari said on Monday, adding that the building was still under construction. 

"All this damage will be repaired in the coming days," Hagari said. "This base is operating around the clock, it functioned during Operation 'Iron Shield' and today as well, from this base, aircraft took off to protect the skies of the State of Israel."

Another ballistic missile appeared to have been aimed at a radar site in northern Israel, but it missed its target, the U.S. officials told Martin.

The IDF said several other launches were made from Yemen and Iraq, but none of those weapons  crossed into Israeli territory. Dozens of rockets were also fired from Lebanon toward northern Israel early Sunday morning, and Israel carried out airstrikes against Hezbollah targets across Lebanon.

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Haley Ott is the CBS News Digital international reporter, based in the CBS News London bureau.

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The Biden administration might ban TikTok. These Latinx small-business owners are worried

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After years of dreaming, Ruben Trujillo had finally launched his own business. It didn’t go the way he had expected.

It was 2020 and he was having a tough time. Trujillo had just become the primary caregiver for his grandmother, he was let go from his full-time teaching job, and Cafe Emporos, the company he launched that sells personalized coffee filters, was struggling.

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“I had this dream, and now I have nothing to show for it,” Trujillo remembered thinking. “I was like, ‘OK, I failed.’ This is what failure feels like. This is the bottom of the bottom.”

Having “nothing to lose,” Trujillo stood in front of a red background with Christmas lights and recorded a few TikTok videos plugging his product.

“They hold cups of coffee inside,” Trujillo said, giving a demonstration of a packet emblazoned with a group photo and a personalized message. He opened the packet, which expands into a single-use filter that a customer can pour hot water into for a fresh cup of coffee.

Suddenly, the clip began picking up views and comments.

“This is no lie the most fascinating and coolest product I’ve seen,” one person wrote. Another added: “My jaw dropped when that bag transformed.”

It quickly dawned on Trujillo that he had hit the jackpot.

“It was like, I had just pulled a slot, and it was just ‘chi-ching, chi-ching, chi-ching,’ ” he said.

His sales skyrocketed. Within a few days, Cafe Emporos had received thousands of sales. Since then, Trujillo has expanded his business to cater toward weddings and large events. He credits it all to those videos.

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Trujillo is among Latinx business owners who credit the app for drawing attention to their business.

According to a recent study conducted by consulting firm Oxford Economics and funded by TikTok, 43% of Latinx entrepreneurs said the social media platform is critical to their business’ existence. Additionally, 59% of Latinx owners said TikTok has had a significant impact on their business’ success.

The app is also popular among Latinxs — nearly half of U.S. Latinxs said they used TikTok, per a recent Pew Research Center report.

TikTok has previously argued that if the Biden administration followed through on its threat to ban the app in the United States unless it’s sold by its China-based parent company, ByteDance, it could have adverse consequences for small-business owners who rely on the platform for inexpensive marketing.

Politicians on both sides of the aisle allege that the app is a threat to privacy and national security because the company that owns it is beholden to the Chinese Communist Party. In March, Congress passed a bipartisan bill to compel ByteDance to sell the app or face a ban . The legislation is stalled at the Senate.

“We are hopeful that the Senate will consider the facts, listen to their constituents, and realize the impact on the economy, 7 million small businesses, and the 170 million Americans who use our service,” TikTok spokesperson Alex Haurek said in a statement after the vote.

Jaz and Sam Sears of AZ Taco King — a Mexican restaurant chain in Arizona — said that TikTok helped turn their taco business from a street vending stand to four brick-and-mortar restaurants. Jaz Sears said that oftentimes customers come in with their phone in hand, showing them a video of a dish they saw on the app.

The business even pays an in-store ode to its TikTok following.

“We have neon lights at our restaurants that say ‘TikTok made me do it.’ So [customers] always go to take a picture right next to it,” she said.

The app has also allowed Sears to sharpen her digital marketing skills, an area she previously had no experience in. She’s devoted a lot of time researching the best way to advertise her businesses on the app.

“Sometimes, you do work a lot on a video and it might not go viral,” she said. “It’s like a hit and miss. But then when a video does go viral, you’ll feel it.”

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Sears says a TikTok ban would have a direct hit on AZ Taco King, which she claims brings in 70% of sales from TikTok. It would also mean she would have to relearn how to market her business away from social media.

“TikTok grew our business,” she said.

Leila Bedoian, who runs the Local Motel in St. Augustine, Fla., with her husband, Adam Bedoian, said a TikTok ban would be costly for their tourism business, which depends on the app to reach audiences across the nation — even the world.

After working in the hospitality industry for decades, Bedoian shifted gears and bought a motel that she renovated to have a retro aesthetic. At first, the bookings weren’t coming in until TikTok boosted its presence more than any other social media platform.

“I just don’t see how — even if I did paid advertisements — I would be able to reach 45,000 people in a month,” Bedoian said. “So as a small-business owner, I would have to figure out how to replace those views.”

More to Read

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March 18, 2024

Angie Orellana Hernandez is a 2023-24 reporting fellow at the Los Angeles Times. She previously worked at The Times as an arts and entertainment intern. She graduated from USC, where she studied journalism and Spanish. Prior to joining The Times, she covered entertainment, as well as human interest, legal and crime stories at E! News. Her writing can also be found in USA Today, the Boston Globe, CNN and KCRA3.

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