Allocation and Apportionment of Cost
ALLOCATION OF COST: allocation of cost is a process by which
cost items are charged directly to the cost center. for example: electricity
charges can be allocated to various departments if separate meters are
installed, salary of stores clerk can be allocated to stores department etc.
cost items are charged directly to the cost center. for example: electricity
charges can be allocated to various departments if separate meters are
installed, salary of stores clerk can be allocated to stores department etc.
APPORTIONMENT OF COST: now apportionment of cost is a process
where u cant easily identify a cost to a particular cost or service center,
for example if there is single electricity meter for the all department,
then it becomes a little difficult to allocate the exact cost to a cost
center, another example rent will have to be apportioned to various
departments on the basis of floor space.