Question

What are the various principles of apportionment of overheads? explain and give examples of the bases used for apportionment and re-apportionment?

Answer 1

If the service rendered by a particular item of expense to different departments, can be measured, overhead can be conveniently apportioned on this basis. Thus the cost of maintenance may be apportioned to different departments on the basis of machine hours or capital value of the machines, rent charges to be distributed according to the floor space occupied by each department.