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Allocation, Apportionment and Re-Apportionment
Allocation, Apportionment and Re-Apportionment
Allocation, Apportionment and Re-Apportionment
and Re-apportionment
Answer: While learning Production Overheads topic in CAT - T4 or ACCA - F2
we come across these terms for the first time.
Raw material costs and Labour costs being the direct costs can be computed easily
on per unit basis. But to compute the overheads we make overhead distribution
sheet/chart/table.
Under primary distribution, departments are charged with costs which are incurred
by them either through allocation or apportionment without making any distinction
between production or service departments.
Sometimes particular overheads are caused by more than one department and
unable to determine how much cost is incurred by which department we divide one
overhead cost on arbitrary basis among different departments. This is
apportionment.