Abstract Within most multiple cost pool allocation systems, the direct and step methods are commonly used to allocate service activity costs to production activities. But because they ignore service activity interactions, these methods can produce significant allocation errors, inaccurate product costs, and poor operating decisions. This paper provides data on allocation errors for 54,000 computer generated firms across a variety of service environments. The results show that allocation errors can vary a great deal, can be quite large, and are dependent on specific measurable service activity characteristics. The data can assist individual managers in determining if a switch to the theoretically correct reciprocal allocation method is justified, thus helping to further improve existing cost allocation systems.