The problems of al locat ing costs of a computer system are discussed , and a procedure is presented to solve these problems. The concept of a Responsibi l i ty Center is presented , and cost al locat ion rules for the operat ion of the Responsibi l i ty Center are developed. The cost al locat ion scheme influences users of a computer faci l i ty to adjust their demands for processing to that level most beneficial to the overal l organizat ion in quest ion. Four condi t ions form the basis for the development of the cost al locat ion formula: (1) Charges for the use of a joint faci l i ty must cover costs; (2) a user ' s charges are based on the incremental cost caused by the user; (3) the charge is independent of the names assigned to users or ordering of users (if some users cause the same incremental costs , then the user ' s charges are the same); and (4) if the user changes his requirements and as a result his incremental costs are changed , then the cost al locat ion is changed appropriately. The costing procedure based on the above four condi t ions provides a rat ional way to distribute costs; it al locates greater costs to the user whose al ternat ive costs are greater. A five step planning procedure implements this cost al locat ion procedure. (1) Statement of long-range and global requirements , (2) detai led statement of requirements , (3) translat ion of requirements into a design , (4) specificat ion of cost al locat ion , and (5) determinat ion of the best systems desi gn .