Decision making concerns over cost allocations, especially common cost allocations, have a long history. They are well canvassed in Thomas (1969) and Wells (1978). This article revisits the cost allocation debate, albeit in a new setting, and rehearses arguments relevant to long- and short-term decision contexts. Here a means is proposed to address those problems, namely to adopt the investment-based approach to cost accounting. This approach draws on ideas of Hotelling (1925), Preinreich (1938) and Schneider (1961), and applies the notion of net present value in another setting, namely to cost accounting theory. Research has revealed no discussion of this in the Anglo-American literature. This article shows analytically that the investment-based approach offers a general basis for decision-oriented cost accounting, as it combines investment theory with cost accounting and thereby connects long-term with short-term decisions. While reviewing primarily European literature, it also examines several Anglo-American works. The analysis reveals how for three classical decision problems—production program planning, purchase order lot sizes, and break-even price limits—two different types of costs, namely depreciation and material costs, have to be based on cash flows and net present value. The proposed investment-based approach permits an examination of the extent to which cost accounting concepts and cost information are relevant to those decisions. This theoretical concept is used to derive pertinent cost dimensions and to solve traditional problems of cost allocation. A caution is that the investment approach is limited to decision facilitating cost accounting. Whether it may be possible to couple it with agency theory and its focus on decision influencing has not been explored and is an issue for further research.