Common costs are allocated when the cost falls under federal auspices. Costs that are the responsibility of the state, such as the 55% share of the San Luis Unit, are not included in the allocation base. Non-reimbursable costs are also not included in the allocation base and are ultimately the responsibility of the taxpayer. Some other costs are also not allocated, or are subject to unique allocation methods. These are also excluded. These include interest during construction and safety of dams' improvements.

Allocating costs for internal decision making allows managers to perform a more effective cost-benefit analysis on each project. The allocations are done on the basis of reimbursable costs. It is important for managers to understand how much of a project's cost structure is not reimbursable. However, for these public works projects, managers also need to understand the cost for each in order to make decisions with respect to...
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