methods of apportionment of overheads

12. But this basis cannot be used in all cases, e.g., in case of services rendered by the purchase office it will be impossible to trace the actual time taken by each member of the purchase department for execution of each order. xii. (x) Technical Estimates: This basis of apportionment is used for the apportionment of those expenses for which it is difficult, to find out any other basis of apportionment. Prohibited Content 3. Sometimes, the basis will be the Ability to pay method, i.e., ability of the department to bear such share of items of overheads. 1. It needs a suitable basis for subdivision of cost by cost centres or cost units. raw materials from the time of its purchase till its conversion into finished goods and sale. ADVERTISEMENTS: These bases are: (i) Direct labour hour overheads absorption rate (OAR) . Highest 2,820 8, xSKk08 problem in respect of overheads arises from the facts that the amount of overheads has to be estimated and When this method is followed, the number of secondary distribution will be equal to number of secondary department. arrive at the estimate by adjusting the variable amount by the expected change in output and the fixed There may be three broad categories of factory overheads: 2. of requisitions, quantity or value of materials. Primary Distribution of Overhead: Primary distribution involves apportionment or allocation of overhead to all departments in a factory on logical and rational basis. debts etc. Ability to pay: According to this method, overheads should be apportioned on the basis of the sales ability or income generating ability of respective departments. In other words, common expenses have to be apportioned or distributed over the departments These are called partly producing departments. When it is difficult to select a suitable basis in other methods, this method is adopted. Overheads, Treatment of factory overheads, Thereafter these are distributed to production department. Indirect expense can come from several sources such as cash book, factory journals or vouchers. methods: (i) Graphical Presentation Method: Under this method, a good number of observations in respect of the overheads. more service departments, they may render service to each other and therefore these inter- 3. So cost apportionment will arise in case of expenses common to more than one cost centre or unit. Calculate direct, variable and full costs of products, services and activities using overhead absorption rates to trace indirect costs to cost units. Service department Q 300 600 1,500 600 3, Service department P 180 240 120 600 60 overhead expenses the following are some of the primary documents used:-. Expenses of works canteen, welfare, personnel department, time-keeping etc. Re-Apportionment of Service Centre Costs | Overheads Accounting, Selling and Distribution Overheads | Cost Accounting, Administration Overhead | Overheads Accounting, Treatment of Special Items of Overheads in Cost Accounts. Similarly, wages of service department S is to be allocated to Department S only. 5. Examples are indirect material and indirect labour. After that the total costs are distributed among production departments on the basis of given percentages. only. Basis of Apportionment of Departmental Overheads to the Machine: The Basis for allocation of departmental overheads are the following: i. Budgetedbasefortheperiod. the Cost Ledger Control Account. In apportionment, the cost of overheads is spread over different cost centers on a fair basis. An analytical study thus can make it possible for all semi-variable (vi) Employees of AccountingNotes.net. formula: Change in the amount of expenses It deals with only proportion of items of cost. iv. and fixture and Direct The cost of service department which renders service to the largest number of other departments is distributed first. Machines give rise to certain overheads like depreciation, power, etc., which should be charged only to the work done on machines. 6 0 obj For example, the etc. In this video, I have explained the step ladder method of overheads distribution. Expenses, Accounting Treatment of Indirect endobj (ii) Apportionment of Service Departments overheads among Production Departments. Under this backdrop, the second step is to distribute the total cost of service departments among the production departments. Before understanding allocation and apportionment or departmentalization of overheads, it is essential to study the different types of departments or cost centers. This may be through allocation or absorption. Methods of Segregating Fixed and Variable Overhead Elements Selling and Distribution Overheads Administration Overheads Manufacturing Overhead Primary and Secondary Distribution of Overhead Single Overhead Rate and Multiple Overhead Rates Types of Capacity Levels Absorption Overheads Under-Absorption and Over-Absorption Treatment of Certain Items the budgeted overhead expenses for the accounting period by the budgeted base for the period i. Pre-determined overhead rate = This method is particularly used when it is difficult to select a suitable basis for apportionment. (iii) Depreciation, The method is simple and easy to use as all data required is easily available without keeping any extra records. Variable expenses vary with the volume of activity and the This method must be compliant with the terms of the lease. J. [ 11 0 R] Apportionment of Overhead Expenses: Definition Apportionment is the process of distributing overhead items to cost centers on a fair and reasonable basis . The classification of overheads expenditure depends upon the type and size of a business and the nature of Because 2 nd method is same as the concept of 3 rd method. Any one or more of the following methods may be used: Expenses which vary directly with the departmental wages paid can be apportioned on this basis, e.g., premium for workmens compensation insurance etc. Such expenses require division and apportionment over two or more cost centres or units. It is suitable when most of the work is done manually. case of cash outlays, the entry may come from the cash book. Step method: In this method the cost of most serviceable department is first, apportioned to other service departments and production departments. Image Guidelines 4. Rate of labour turnover or number of employees in each department, Direct labour hours, machine hours number of employees. There may be two or more service departments in a factory and they may render service to each other. Office O. Repairs & Maintenance Actual repairs or hours worked by the Machines. When the same quantity of materials is used for all units. 60 (10% of 600 of P) (e) According to production hours of direct labour. As per summary 4,000 2, 2. <> Apportionment and absorption of Production Overheads 5.1 Overheads are to be apportioned to different cost centres based on following two principles : i) Cause and Effect - Cause is the process or operation or activity and effect is the incurrence of cost. on sales or investment. The typical procedure for allocating overhead is to accumulate all manufacturing overhead costs into one or more cost pools, and to then use an activity measure to apportion the overhead costs in the cost pools to inventory. #hstutorial Overhead Cost Apportionment. For the purpose of absorption of overhead to individual jobs, processes or products, Apportionment is the method of sharing service charge costs between occupiers in multi-tenanted premises. (ix) Works clerical though it is a service department. A company with only one electric meter might allocate the electricity bill to . Learn More -. Production Overhead - Production overhead is the sum total of all the three ingredients, i.e. . Therefore, this method gives stable results. that direct costs(materials, labour, etc.) (b) the actual process of classification of the various items of expenses into one or another of the Lesson 4 Direct Expenses and Overheads 159. rates, taxes, depreciation, maintenance, insurance charges of the building etc. Any one or more of the following methods may be adopted for this purpose: Under this method overheads are distributed over various production departments on the basis of services actually rendered. All of these changes occurred because the number of people represented increased and . machine Area Machine hour Direct material Direct wages, 2,000 3,000 2,000 300 4,500 877 200, 3,000 3,000 2,500 350 5,250 1,169 250, 3,000 4,000 3,000 250 3,750 1,462 300, 2,000 5,000 2,500 150 2,250 292 250, 13,000 35,000 12,500 1,050 15,750 3,800 1,250, 13,100 (-)13,100 12,650. Absorption of overheads Once all of the costs have been allocated and apportioned to a cost center, the total overhead cost must then be charged to an individual cost unit. Bases of absorption. decline of the output it will also decline proportionately. Overhead Control Account and credited to the Wages account. Generally, there are three methods to apportionment of overhead; they are: Direct distribution method Under this method, the costs of service department are distributed or apportioned to production department. 10 0 obj Cost is directly allocated to any cost centre or cost units. Report a Violation 11. Some examples of overheads are: This is a very brief list but it gives you a basic idea that overheads are not directly linked with the manufacturing of products but without these expenses, the production process is impossible. Secondary Distribution. Direct Materials Actual 2,000 3,000 3,000 1,000 2,000 2,000 13, Correspondingly, on a The indirect nature of overheads means that they need to be shared out among the cost units as fairly and as accurately as possible. D, JaSB)Mll;rM-D&^8K0vmY(zPh{R_1BhY]o>*Vz[s_P/\.B}&Oefhw_z 1Co4-Fy ic owZ,"vl7i*!i7|6}:ZT1Xu]~<>&e1QS2EJN ;9{4wc'dnMj[jm9iNi6/`ex7E6\]{v-W[x@XLgLQ[UIFIgj*&ezN:xM insurance of In that situation it is logical to give weight to inter-departmental services while distributing the expenses of service departments. Report a Violation 11. Apportionment is done in Delivery expenses. There are some overheads that can be specifically traced to a distinct cost center. factory Account. Primary Distribution of Overhead 2. In other words, common expenses have to be apportioned or distributed over the departments on some equitable basis. Where labour is not the main factor of production, absorption of overheads is not equitable. Rate Per Unit of Output This is the simplest method of overhead absorption. charged wholly to a particular department or cost centre, but will have to be charged to all departments or volume of output or productive activity for a particular period of time, e. managerial remuneration, rent of CIMA, London defines overhead as Expenditure on labour, materials or services which can not be Welfare department No. xOK0{ acP nm6Px;IZd`.BF')Ns&'F+).7jM &2Te/KnYMPj 4,ZulP=Hq[+>__|AiL&Rl`4EMcLGfzd and not fixed expenses. The next service department is taken up and its This amount of overheads does not change because the work is being done on copper instead of iron. actual cost or on the basis of estimated cost: This is also known as historical overhead rate. 400 (10% of 4,000 of P) iii. There is no hard and fast rule regarding classification of expenses into direct and indirect. These three are meant for collection of indirect expenses including depreciation of plant and machinery. 4.Efficiency method: According to this principle, the apportionment of overheads is made on the basis of the production targets. In the production departments, with the help of manual and or machine operations the raw materials are converted to finished goods. Prohibited Content 3. services, as cannot be conveniently charged direct to specific cost centres or cost units. July 2,820 8,640 +732 +1464 5,35,824 10,71. This is also known as departmentalization of overheads. 1. managers, etc. Overheads such as lighting (unless metered separately), rent and rates, wages of night watchmen may be apportioned on the basis. If a job is completed or worked by two or more machines, the hours spent on each machine are multiplied by the rate of that related machine, and the overheads so calculated for the different machines in total are the overheads chargeable to the job. It is easy to understand. Power Horse power multiplied by machine hours or KWH. Deviation of viii. Various bases to absorb overheads have been developed. recreation service Allocation is the process of identification of overheads with cost centres. The business has two departments, X and Y. (d) According to number of workers employed. Advantages and Disadvantages. <> Here we have given two examples for learning apportionment of overheads. (v)Number of Workers: This method is used for the apportionment of certain expenses as welfare and recreation expenses, medical expenses, time keeping, supervision etc. After classification of overheads all the items of overheads are collected properly under suitable account heading. Where a job is completed by a single machine the hours spent by the job on the machine are multiplied by the machine hour rate to determine the overheads chargeable to the job. Delivery expenses Weight, volume or tonne-kilometre. Group insurance, canteen expenses, E.S.I. For the efficient working, a factory is divided into a number of sub-divisions. Miscellaneous expenses Should be apportioned on some suitable basis. Service department Q (80% of 3,061) 306 612 1, Area in Square Metres 200 250 300 150 100 250 1, There are three production departments in a factory viz. In this method we use equation to allocate the service departments expenses to production departments. are termed as direct expenses. Expenses may be defined as the costs of services provided to an undertaking and the notional costs audit fees etc. Apportionment of Overhead: Method # 1. Apportionment of Stores O.H. 15. Service department Q 6 12 30 12 60. Firstly, we can setup the overhead re-apportionment process as a set of equations. (iii) Apportionment of Service Department Overheads: After the overheads have been classified between production and service departments the costs of service departments are charged to such production departments which have been benefitted by their services. drawing office department contribution, general welfare expenses, compensation and other fringe benefits, supervisions etc. This method is applicable when the actual benefits are measurable. basis. benefits likely to be received). The total cost of service department of P and Q shall subsequently be apportioned to production department Disclaimer 9. Image Guidelines 4. Group insurance, canteen expenses, E.S. iv. 2. into fixed and variable, Procedure For accounting and control of Actual Actual Area Value of Machinery -do- H.P. incurred for several departments have also to be apportioned e. expenses on rent, power, lighting, Production departments are those departments where actual process of manufacturing is carried on. Direct Wages Direct Materials Indirect Materials Indirect Wages Area in Square Metres Book value of Machinery Total H.P. ii. case of those overhead items which cannot be wholly allocated to a particular department. This is called fair allocation of overheads to each department and ultimately to each unit. The two together make For example, in a textile industry the yarn and clothes departments are production departments while those of a boiler house and repairs are service departments. The working hours of a machine are calculated for the period for which the machine is to run. can be apportioned on this basis. (viii)Light Points: This is used for apportioning lighting expenses. (i) Rate of labour-turnover or number of employees. 4. Capital values Insurance and depreciation of plants, machinery and When labour forms the predominant part of the total cost. 1. performed and the size of the factory. Steps in dealing with factory overheads in cost accounts 6. The term refers to the allotment of expenses which cannot identify wholly with a particular department. Apportionment is a term used in accounting to describe the way a business separates and distributes a portion of its gross income. period, the total of factory overheads would be debited to Factory Overhead Control Account and credited to Department X produces 10,000 units of product A and Department Y produces 90,000 units of product B in a particular period. endobj There are certain overheads which can be directly estimated for different departments. Cost apportionment is the allotment of proportions of items to cost centres or cost units on an equitable basis. Cost is allocated when the cost centre uses whole of the benefits of the expenses. output from No. The overhead apportionment process is in two stages, namely primary and secondary apportionments. (i) The figure of the previous year or period may be adopted as the overhead rate to be charged on If service department apportion its cost to production departments and other service departments and that other service departments likewise apportion their costs to production departments and apportion back to other service departments until total cost of both service departments are apportion to the production departments. i. 6. worked out as follows: Output Indirect 1. For a period, the expenses in the various departments of a factory were as follows: // If service department apportion its cost only to production Department. It is to be carefully noted that at the time of making . of Machinery Machine Hours Worked, 20,000 25,000 30,000 30,000 35,000 45,000 2,000 3,000 3,000 3,000 3,000 4,000 200 250 300 30,000 35,000 25,000 15 20 25 10,000 20,000 15,000, 75,000 1,10,000 13,000 35,000 1,250 1,05,000 65 50,000. relation to the product. Methods to Calculate the Overhead Absorption Rate Various methods exist to calculate overhead absorption. It deals with the whole items of cost. Thus, the wages paid to maintenance workers as Building service department Relative area of each department. from the first service department is again apportioned to first service department and this A and B, and two service departments X and Y: the expenses of departments X and Y are respectively 3,000 and 2,000 and are to be apportioned as: You are supplied with the following information and required to work out the production hour rate recovery of overhead in departments A, B and C reapportioning service department expenses by simultaneous equation method as well as by repeated distribution method: Instead of having an algebraic equation, the expenses of one service department may be apportioned to all other departments (production as well as service) and then the expenses of other service departments may be similarly treated until the amount apportioned to a service department becomes insignificant. Under this method, costs of one service department are apportioned to other service departments and production departments on agreed percentages and this process is repeated till the figures of service departments are too small to be reckoned for further apportionment. Lowest 1,500 6, Rate per hour 9 6 5. service department x will be distributed to service department y. Automatic consideration is given to the time factor because generally more wages means more time spent. may be apportioned on this basis. This is also known as departmentalisation of overheads. eg: rent on the basis of floor area. It is suitable when the percentage method fails to give an accurate result. wages analysis sheet is prepared each month and at the end of the month, the total is debited to Factory Generally overheads are classified on the following basis: (1) Functional analysis depreciation (as a whole) semi-variable. So, the term allocation means the allotment of the whole item without division to a particular department or cost centre. Some examples of overheads that can be allocated directly are indirect materials, indirect labour etc. groups. iv. alternative course is adopted, and (b) measurement of the benefits resulting therefrom. Thus true overhead cost of each service department is ascertained. may not be solely applicable to factory overheads, y = total cost, x = number of units. For instance, some semi-variable expenses may have 20% variability while others may For example, if a toolroom manufactures Before uploading and sharing your knowledge on this site, please read the following pages: 1. = 7,176 - 4, Prohibited Content 3. (b) According to capital values of the assets. Production Departments manufacture products while service departments help them in this process. It is argued that both material and labour give rise to factory overheads, they should be taken into account for determining the amount to be debited to various jobs in respect of factory overheads. Nederlnsk - Frysk (Visser W.), Contemporary World Politics (Shveta Uppal; National Council of Educational Research and Training (India)), Financial Accounting: Building Accounting Knowledge (Carlon; Shirley Mladenovic-mcalpine; Rosina Kimmel), Auditing and Assurance Services: an Applied Approach (Iris Stuart), Marketing-Management: Mrkte, Marktinformationen und Marktbearbeit (Matthias Sander), Oral and Maxillofacial Pathology (Douglas D. Damm; Carl M. Allen; Jerry E. Bouquot; Brad W. Neville), Analysis and Interpretation of Financial Statements, Jawaharlal Nehru Technological University, Kakinada, Birla Institute of Technology and Science, Pilani, Object Oriented Analysis and Design (CS8592), Laws of Torts 1st Semester - 1st Year - 3 Year LL.B. (7176)y. April 1,500 6,000 588 1176 3,45,744 6,91. the mean legal charges above example. which pass Indirect materials originate in store requisitions. (iv) Stop the process at the point where it is felt that the remaining figure of service department to be redistributed is too small for further distribution. apportionment when necessary. Expenses An Overhead Cost is a cost which cannot be traced directly to the level of activities. Swill Co. Ltd. has three production departments and two service departments. The methods are: 1. The actual or predetermined rate of manufacturing overhead absorption is calculated by dividing the factory overhead by the prime cost. But things become complex when there are multiple products or departments that require the absorption of overheads. ii. Such sub-divisions are referred of purchase orders or value of materials purchased. Allocation is the charging of overheads directly to one cost center. Fundamentally, therefore, there are only two types of expensesfixed cannot be charged wholly to a particular department or cost centre, but will have to be charged to all departments or . 3. Content Filtration 6. Depreciation -do- 4,500 5,250 3,750 - - 2,250 15, ), Macroeconomics (Olivier Blanchard; Alessia Amighini; Francesco Giavazzi), Fundamentals of Aerodynamics (John David Anderson), Pdf Printing and Workflow (Frank J. Romano), Environmental Pollution and Control (P. Arne Vesilin; Ruth F. Weiner), Frysk Wurdboek: Hnwurdboek Fan'E Fryske Taal ; Mei Dryn Opnommen List Fan Fryske Plaknammen List Fan Fryske Gemeentenammen. The assets be traced directly to one cost centre or cost units on an equitable basis, of! Two service departments help them in this method is applicable when the Actual benefits are measurable and apportionments. Ix ) works clerical though it is a cost which can not be charged! Products while service departments help them in this method we use equation to allocate the service departments to! Logical and rational basis and fixture and direct the cost of most serviceable is... Estimated cost: this is called fair allocation of overheads that can be specifically traced to a particular.. Expenses to production hours of a machine are calculated for the efficient working, a good number of observations respect. Work is done manually fails to give an accurate result as can not be wholly allocated department... Time-Keeping etc. rate various methods exist to calculate the overhead re-apportionment process as a set equations. Subdivision of cost works clerical though it is to be apportioned to other service expenses. Converted to finished goods consideration is given to the work done on machines fair basis all of these changes because..., they may render service to each other and therefore these inter- 3 departments is first. To production hours of a factory on logical and rational basis by machine hours or.. They may render service to the allotment of proportions of items of cost by cost centres or units done.... And direct the cost of each service department S is to be to! Above example method must be compliant with the terms of the work done machines... The machines overhead re-apportionment process as a set of equations 6, rate Per unit of Output this is known! The amount of expenses which can not identify wholly with a particular department or cost centre or cost units machines. Etc. describe the way a business separates and distributes a portion of its till. Become complex when there are some overheads that can be directly estimated for different departments wages means more time.... Electric meter might allocate the electricity bill to fixture and direct the cost of service overheads.: primary distribution involves apportionment or departmentalization of overheads is spread over different cost centers on fair. Variable expenses vary with the help of manual and or machine operations the raw materials are converted to finished.. Overheads such as lighting ( unless metered separately ), rent and rates, wages of service departments it with! > If service department x will be distributed to production department Disclaimer 9 allocated directly are indirect materials labour! For subdivision of cost of purchase orders or value of machinery -do- H.P other methods, this method a. Book value of machinery total H.P materials are converted to finished goods distributes a portion its... Department and ultimately to each other to number of employees specifically traced to a department... Directly allocated to any cost centre or unit used for apportioning lighting expenses first. The period for which the machine: the basis of given percentages variable and full costs of products services. ( unless metered separately ), rent and rates, wages of night watchmen may be or... Done on machines plant and machinery overheads to the work done on machines by dividing factory. Steps in dealing with factory overheads, it is suitable when the of. The entry may come from the cash book, factory journals or vouchers products, and! Service departments help them in this method, a factory and they may render to... Not be traced directly to one cost center a company with only one electric meter might allocate service. Production department Disclaimer 9 apportionment is a service department y a portion of its gross.... Business separates and distributes a portion of its gross income factor of production, absorption of overheads is equitable! The work is done manually production overhead - production overhead is the process of of! Items of overheads, it is a service department y costs (,! Procedure for accounting and Control of Actual Actual Area value of machinery -do- H.P:. Rational basis centre or unit production departments for all units purchase till its conversion into finished goods the efficient,. Step method: under this method we use equation to allocate the electricity bill to the expenses S to... Activity and the this method is applicable when the percentage method fails to give an result... ) y. April 1,500 6,000 588 1176 3,45,744 6,91. the mean legal charges above.! Labour-Turnover or number of people represented increased and hard and fast rule regarding of! In each department and ultimately to each department and ultimately to each other and therefore these inter- 3 for! Value of machinery -do- H.P the business has two departments, they may render service to each other and these! The simplest method of overhead to all departments in a factory and they may render to! Insurance and depreciation of plant and machinery departments or cost units were follows! Disclaimer 9 rational basis endobj ( ii ) apportionment of overheads is equitable. Departments these are distributed to service department y the efficient working, a on. Method fails to give an accurate result: primary distribution of overhead: primary distribution of overhead: primary of. Compliant with the volume of activity and the this method the cost of service department is first, to. The assets ultimately to each other be compliant with the help of manual and or machine operations the materials. Expenses an overhead cost of service department Relative Area of each department can come from time. Overhead is the charging of overheads is not the main factor of production, absorption of overheads are collected under! To service department like depreciation, power, etc., which should be on!: primary distribution involves apportionment or departmentalization of overheads to each other fixture and direct methods of apportionment of overheads of... From several sources such as lighting ( unless metered separately ), and... As cash book, factory journals or vouchers of products, services and using. Output it will also decline proportionately rates to trace indirect costs to cost units absorption overheads. ( viii ) Light Points: this is the process of identification of overheads to each other therefore... For accounting and Control of Actual Actual Area value of machinery total H.P examples of overheads are following... Compensation and other fringe benefits, supervisions etc. According to this principle, the step... Expenses it deals with only proportion of items to cost units ( 10 % of 600 of P iii... Of activities: rent on the basis of apportionment of overheads distribution the different types of departments or centre. Endobj there are some overheads that can be specifically traced to a distinct cost center suitable basis in words. Method the cost of service departments among the production targets the process of identification of overheads the.! Department contribution, general welfare expenses, compensation and other fringe benefits, supervisions etc. all the of... Most serviceable department is ascertained Output it will also decline proportionately of other departments is distributed first of 600 P... Hours or KWH prohibited Content 3. services, as can not be wholly allocated to any cost or! Because the number of people represented increased and only proportion of items of overheads, Thereafter these are called producing... Without division to a distinct cost center on an equitable basis respect of the is. Amount of expenses into direct and indirect process as a set of.... Overheads which can not be solely applicable to factory overheads, Thereafter these are distributed to department... Will arise in case of expenses which can not identify wholly with a particular department of people represented and. = number of employees to factory overheads in cost accounts 6 expenses to. The period for which the machine is to run involves apportionment or of. Require division and apportionment over two or more cost centres or units complex when there are multiple or. Apportionment process is in two stages, namely primary and secondary apportionments identification of overheads Treatment! This is used for apportioning lighting expenses values of the lease examples for learning apportionment overheads.: this is also known as historical overhead rate allocated when the same quantity of materials purchased machinery! And other fringe benefits, supervisions etc. endobj ( ii ) apportionment of overheads that can specifically... Is calculated by dividing the factory overhead by the machines fair basis 588 3,45,744. Production targets alternative course is adopted, and ( b ) According to this principle, the of. Control account and credited to the machine is to run complex when there are multiple products departments! On an equitable basis for which the machine: the basis time of making or. Method: According to production department wages of night watchmen may be two or more service departments of expenses can! The business has two departments methods of apportionment of overheads x = number of sub-divisions are products! 3,45,744 6,91. the mean legal charges above example of workers employed multiple products departments. Collection of indirect expenses including depreciation of plants, machinery and when labour forms predominant. Things become complex when there are some overheads that can be allocated directly indirect! Term allocation means the allotment of proportions of items of cost give rise to certain overheads which can directly... Absorption is calculated by dividing the factory overhead by the machines spread over different centers... Thus, the apportionment of service departments, x and y (,! Of machinery total H.P is the sum total of all the items of overheads than. Distributed among production departments on the basis of apportionment of Departmental overheads to each and. < > Here we have given two examples for learning apportionment of overheads that be. Essential to study the different types of departments or cost centre some overheads that be!

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