Difference Between Cost Allocation and Cost Apportionment

Allocation of cost means a process in which the entire amount of overhead is charged to a specific cost center. ... In contrast, cost apportionment involves the proportionate distribution of cost to different departments, on a reasonable basis.

1. What is difference between apportionment and allocation?
2. What is the meaning of cost apportionment?
3. What are the difference between allocation apportionment and absorption of overhead?
4. What do you mean by allocation and apportionment of overhead?
5. How is apportioned cost calculated?
6. What is the process of apportionment?
7. What is another word for apportionment?
8. What is the basis of apportionment for rent?
9. What is the purpose of apportionment?
10. What is the allocation and apportionment of expenses?
11. What are the three methods that can be used to allocate overhead cost?
12. Why is it important to allocate overhead costs?

What is difference between apportionment and allocation?

Allocation is used to designate the non-business income to a specific state or local tax authority. Apportionment is used to assign the business income among the states.

What is the meaning of cost apportionment?

Apportionment of Cost

It is the distribution of different cost items in proportions to the cost unit or cost centre on a suitable basis. Apportionment of cost refers to the distribution of various overhead items, in proportion, to the department on a logical basis.

What are the difference between allocation apportionment and absorption of overhead?

The expenses are directly allocated to the departments. The expenses are proportionately distributed to different departments. ... Under allocation, the entire expenditure is distributed to a particular department. Under apportionment, the total expenditures are distributed among the departments.

What do you mean by allocation and apportionment of overhead?

Allocation of Overheads refers to the allocation of whole item of cost into Cost Centre and Cost Unit. ... Apportionment of Overheads refers to the allocation of proportion of item to the Cost Centre and Cost Unit among different departments.

How is apportioned cost calculated?

For example, if staff canteen costs of 7,000 are apportioned to a department which has a 28 employees out of a total of 108 employees, then the amount apportioned is 7,000 x 28 / 108 = 1,815. Further details of overhead apportionment calculations can be found in our cost apportionment of general overhead tutorial.

What is the process of apportionment?

Apportionment is the process of dividing up the 435 memberships, or seats, in the House of Representatives among the 50 states according to population. ... It uses the results of the count to calculate the number of House memberships each state is entitled to have.

What is another word for apportionment?

In this page you can discover 22 synonyms, antonyms, idiomatic expressions, and related words for apportionment, like: partition, allotment, division, distribution, allowance, dividend, measure, part, share, admeasurement and allocation.

What is the basis of apportionment for rent?

This occurs when an overhead cannot be directly assigned to one particular cost centre. For example, rent and business rates are seldom incurred by individual cost centres, therefore floor area is often used as a basis of apportionment to share the costs between appropriate cost centres. See also allocation base.

What is the purpose of apportionment?

Apportionment is one of the most important functions of the decennial census. Apportionment measures the population so that seats in the U.S. House of Representatives can be correctly apportioned among the states.

What is the allocation and apportionment of expenses?

Allocation of cost means a process in which the entire amount of overhead is charged to a specific cost center. ... Conversely, apportionment of the cost is needed when the cost cannot be allocated to a particular cost center. Instead, the cost is shared by two or more cost centers, as per the expected benefit received.

What are the three methods that can be used to allocate overhead cost?

3.2 Approaches to Allocating Overhead Costs

When Hewlett-Packard produces printers, the company has three possible methods that can be used to allocate overhead costs to products—plantwide allocation, department allocation, and activity-based allocation (called activity-based costing).

Why is it important to allocate overhead costs?

Overhead costs are allocated to products to provide information for internal decision making, to promote the efficient use of resources, and to comply with U.S. Generally Accepted Accounting Principles.