Question

the basis of allocation in departmental accounting

Answer 1

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Normally, all direct expenses are charged to the respective departments, in case of indirect or general expenses, proper allocation among the departments must be made in order to ascertain the profit and loss made by each department. Some expenses cannot be apportioned and no basis of apportionment is practicable.

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Answer 2

Answer:

Explanation:

¶ An allocation base is the basis on which Cost accounting allocates overhead costs. ... Allocation bases are mostly used to assign overhead costs to inventory that is produced. For example, an IT department allocates its expenses according to the number of computers that each department uses.

¶ An allocation base is the basis upon which an entity allocates its overhead costs. An allocation base takes the form of a quantity, such as machine hours used, kilowatt hours consumed, or square footage occupied. ... Allocate service department costs to operating departments.

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