An important element in Garcke and Fells' method of cost accounting was the allocation of indirect costs. They "suggested allocating the 'indirect costs' of producing a good proportionally to the amount of labour and materials costs used to make the item."Diewert, W. Erwin. "Measuring the price and quantity of capital services under alternative assumptions." Department of Economics, University of British Columbia, Discussion Paper 01-24 (2001). As they (1887) explained:
