{"id":3346,"date":"2020-02-16T07:41:52","date_gmt":"2020-02-16T07:41:52","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3346"},"modified":"2020-02-16T07:41:52","modified_gmt":"2020-02-16T07:41:52","slug":"difference-between-allocation-and-apportionment-of-overheads","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/","title":{"rendered":"DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_72 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/#DIFFERENCE_BETWEEN_ALLOCATION_AND_APPORTIONMENT_OF_OVERHEADS\" title=\"DIFFERENCE BETWEEN ALLOCATION AND\nAPPORTIONMENT OF OVERHEADS\">DIFFERENCE BETWEEN ALLOCATION AND\nAPPORTIONMENT OF OVERHEADS<\/a><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5' ><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/#The_difference_between_Allocation_and_Apportionment_of_overheads_is_as_follows\" title=\"The difference between Allocation and Apportionment of overheads is as follows:\">The difference between Allocation and Apportionment of overheads is as follows:<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"difference-between-allocation-and-apportionment-of-overheads\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_ALLOCATION_AND_APPORTIONMENT_OF_OVERHEADS\"><\/span><strong>DIFFERENCE BETWEEN ALLOCATION AND\nAPPORTIONMENT OF OVERHEADS<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<h5 class=\"wp-block-heading\" id=\"the-difference-between-allocation-and-apportionment-of-overheads-is-as-follows\"><span class=\"ez-toc-section\" id=\"The_difference_between_Allocation_and_Apportionment_of_overheads_is_as_follows\"><\/span>The difference between Allocation and Apportionment of overheads is as follows:<span class=\"ez-toc-section-end\"><\/span><\/h5>\n\n\n\n<p class=\"has-text-align-center\"><strong>ALLOCATION OF OVERHEADS<\/strong><\/p>\n\n\n\n<p>Allocation is the process of identification of overheads with cost centers. An expense which is directly identifiable with a specific cost centre is allocated to that centre. Thus it is allotment of a whole item of cost to a cost centre or cost unit. <\/p>\n\n\n\n<p><strong>ACCORDING TO CHARTERED\nINSTITUTE OF MANAGEMENT ACCOUNTANTS, LONDON <\/strong><\/p>\n\n\n\n<p>\u201cCost Allocation is the charging of discrete, identifiable\nitems of cost to cost centers or cost units\u201d.<\/p>\n\n\n\n<p><strong>EXAMPLE<\/strong><\/p>\n\n\n\n<p>The total overtime wages of workers of a department should\nbe charged to that department. The electricity charges of a department if\nseparate meters are there should be charged to that particular department only.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong>APPORTIONMENT OF OVERHEADS<\/strong><\/p>\n\n\n\n<p>Cost apportionment is the allotment of proportions of cost\nto cost centers or cost units. If a cost is incurred for two or more divisions\nor departments then it is to be apportioned to the different departments on the\nbasis of benefit received by them. Apportionment is done in case of those\noverhead items which cannot be wholly allocated to a particular department.\nCommon items of overheads are rent and rates, depreciation, repairs and\nmaintenance, lighting, works manager\u2019s salary etc.<\/p>\n\n\n\n<p><strong>ACCORDING TO\nCHARTERED INSTITUTE OF MANAGEMENT ACCOUNTANTS, LONDON <\/strong><\/p>\n\n\n\n<p>\u201cApportionment of overheads is that part of cost attribution\nwhich shares costs among two or more cost centers or cost units in proportion\nto the estimated benefit received, using a proxy\u201d.<\/p>\n\n\n\n<p><strong>EXAMPLE<\/strong><\/p>\n\n\n\n<p>The salary paid to the works manager of the factory, factory\nrent, general manager\u2019s salary etc. cannot be charged wholly to a particular\ndepartment or cost centre, but will have to be charged to all departments or\ncost centers on an equitable basis.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n  <strong>BASIS OF DIFFERENCE<\/strong>\n  <\/td><td>\n  <strong>ALLOCATION OF OVERHEADS<\/strong>\n  <\/td><td>\n  <strong>APPORTIONMENT OF OVERHEADS<\/strong>\n  <\/td><\/tr><tr><td><strong>   MEANING   <\/strong><\/td><td>\n  Allocation is the process of identification of overheads with cost\n  centers.\n  <\/td><td>\n  Apportionment is done in case of those overhead items which cannot be\n  wholly allocated to a particular department.\n  <\/td><\/tr><tr><td><strong>   NATURE OF COSTS   <\/strong><\/td><td>\n  Assignment of particular cost to a particular department or cost\n  center is called as allocation.\n  <\/td><td>\n  These costs are common to various departments and cannot be charged\n  to a particular department or cost center.\n  <\/td><\/tr><tr><td><strong>   PROPORTIONS OF COSTS   <\/strong><\/td><td>\n  Allocation deals with whole items of costs.\n  <\/td><td>\n  Apportionment deals with proportions of items of costs.\n  <\/td><\/tr><tr><td><strong>   BASIS FOR APPORTIONMENT OR ALLOCATION    <\/strong><\/td><td>\n  No base is required for allocation of cost to a department, it is a\n  direct process.\n  <\/td><td>\n  An equitable base is required for\n  Apportionment of cost to the production or services department.\n  <\/td><\/tr><tr><td><strong>   APPLIES   <\/strong><\/td><td>\n  When the overhead costs are related to specific or single\n  departments.\n  <\/td><td>\n  When the overhead costs are related to different departments.\n  <\/td><\/tr><tr><td><strong>   EXAMPLES   <\/strong><\/td><td>\n  Salary paid to the employees of the maintenance department,\n  can be allocated to that department.\n  <\/td><td>\n  Wages paid to the head of the factory, rent of factory,\n  electricity, etc. cannot be charged to a particular department, and then\n  these can be apportioned amongst various departments.\n  <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>CONCLUSION<\/strong><\/p>\n\n\n\n<p>Both allocation and apportionment of cost aim at identifying and assigning the cost to the cost center, but they are different. Cost Allocation is the process of assignment of cost item to the cost object, which is directly traceable. On the other hand, cost apportionment is for those indirect cost items, which are leftover in the process of cost allocation.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/cost-accounting\/\">Cost Accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-cost-accounting-pdf\/\">Scope of cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/elements-of-cost\/\">Elements of cost<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/types-of-cost\/\">Types of cost<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/material-control-in-cost-accounting-pdf\/\">Material control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perpetual-inventory-system\/\">Perpetual inventory system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/pricing-of-materials\/\">Pricing of materials<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/bin-card\/\">Bin Card<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/store-ledger\/\">Stores Ledger<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/incentive-plans\/\">Incentive plans<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/overhead\/\">Overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/accounting-treatment-of-idle-time\/\">Idle time<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/system-of-wage-payment-in-cost-accounting\/\">System of wage payment in cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-time-rate-system-and-piece-rate-system\/\">Time rate vs piece rate wage system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-centre\/\">Cost Center<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/labor-turnover\/\">Labour Turnover<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Difference between management accounting and cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/allocation-and-apportionment-of-overheads\/\">Allocation and apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\">Allocation vs Apportionment of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/absorption-of-overheads\/\">Absorption of overheads<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/over-absorption-and-under-absorption-of-overheads\/\">Over absorption and under absorption of overheads<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/activity-based-costing\/\">Activity based costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-traditional-costing-and-activity-based-costing\/\">Traditional costing vs ABC system<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/reconciliation-of-accounts\/\">Reconciliation of accounts<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/unit-costing\/\">Unit costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-format\/\">Cost sheet format<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-sheet-vs-production-account\/\">Cost sheet vs production sheet<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/job-costing\/\">Job costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/batch-costing\/\">Batch Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-batch-costing\/\">job costing vs batch costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/contract-costing\/\">Contract costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-job-costing-and-contract-costing\/\">Job Costing vs Contract costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/process-costing\/\">Process Costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-costing-vs-job-costing\/\">Process costing vs job costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/joint-products\/\">Joint products<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/by-products\/\">By Product&nbsp;<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/equivalent-production\/\">Equivalent production<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/marginal-costing\/\">Marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/applications-of-marginal-costing\/\">Application of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/cost-volume-profit-analysis\/\">Cost volume profit analysis<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/tools-and-techniques-of-marginal-costing\/\">Tools and techniques of marginal costing<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budget\/\">Budget<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/break-even-point\/\">Break even point<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/process-of-budgetary-control\/\">Process of budgetary control<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explain-the-advantages-and-limitations-of-budgetary-control\/\">Advantages and limitations of budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/budgetary-control\/\">Budgetary Control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/zero-base-budgeting\/\">Zero base budgeting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/standard-costing\/\">Standard Costing<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/variance-analysis\/\">Variance Analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-standard-costing-and-budgetary-control\/\">Standard costing vs budgetary control<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-management-accounting-and-cost-accounting\/\">Management accounting vs cost accounting<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-financial-accounting-management-accounting-and-cost-accounting\/\">Cost accounting vs financial accounting<\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"512\" height=\"152\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1.jpg\" alt=\"Difference between ALLOCATION AND APPORTIONMENT OF OVERHEADS\" class=\"wp-image-4836\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1.jpg 512w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-cropped-Presentation-resize-1-300x89.jpg 300w\" sizes=\"auto, (max-width: 512px) 100vw, 512px\" \/><figcaption>DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS The difference between Allocation and Apportionment of overheads is as follows: ALLOCATION OF OVERHEADS Allocation is the process of identification of overheads with cost centers. An expense which is directly identifiable with a specific cost centre is allocated to that centre. Thus it is allotment of a whole&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/difference-between-allocation-and-apportionment-of-overheads\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;DIFFERENCE BETWEEN ALLOCATION AND APPORTIONMENT OF OVERHEADS&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3348,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[187,56],"tags":[],"class_list":["post-3346","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cost-accounting","category-difference-between"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3346"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3346\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3348"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}