If a cost must be arbitrarily allocated in order to be assigned to a particular segment, then that cost should be considered a common cost.

Common Cost

A cost that is incurred to support a number of cost objects but that cannot be traced to them individually. For example, the wage cost of the pilot of a 747 airliner is a common cost of all of the passengers on the aircraft. Without the pilot, there would be no flight and no passengers. But no part of the pilot’s wage is caused by any one passenger taking the flight.

Arbitrarily Allocated

The process of distributing amounts in a somewhat random or subjective manner, often used in allocating costs to different departments or projects without a strict formula.