Mention the basis for apportioning the following expenses to different departments. (i) Labour Medical Expenses (ii) Factory Supervision expenses (iii) Fire Insurance of stock (iv) Machine Depreciation (v) Lighting expenses (vi) Advertising expenses
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When all the items are collected properly under suitable account headings, the next step is allocation and apportionment of such expenses to cost centres. This is also known as departmentalisation of overhead. Departmentalisation of production overheads is the process of identifying production overhead expenses with different production/service departments or cost centres. It is done by means of allocation and apportionment of overheads among various departments.
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