222

$show=home

Welcome to Accounting Education

The Free Online University with 3400+ Accounting contents as study material which can watch, read and learn anyone, anywhere.

Start your studies

Latest Contents$type=three$count=6$author=hide$comment=hide$label=hide$s=hide$show=home$date=hide

$show=home

Why Accounting Education Important


Free
Simple
Have Quality Study Material
Taught by Expert

Connect Vinod Kumar (Educator)

Why Accounting Education Volunteer


Free training
It's educational
It's fun
It helps others

Become Volunteer Teacher

$hide=page

How to Apportion Overhead Costs

Apportionment of overhead costs means to divide total cost of overhead among different departments or branches or cost centers of a company. We need the steps of apportionment of overhead costs when there are many departments or cost centers of any company because when we know the overhead cost of each department, we can find the total cost of department. With this, we can compare the revenue of each department with their total cost. After this, we can take many decisions relating to particular department.


1st Step : To Classify the Cost Centers 

Cost Centers should be classified into production department and service department.

2nd Step : To Divide Total Overhead on Different Basis of Apportionment 


One of best step to apportion overhead costs is to know the basis of apportionment of overhead expenses and then to use them. All overhead will be allocated to the different department. For example, total rent is Rs. 5000. Area of production department is A 100 Sq. foot. Area of B department is 200 Sq. foot. Area of C department is 700 Sq. foot. Now total ratio of A : B : C  is 1 : 2 : 7

Total Rent Expense of A Department will be = 5000 X 1 /10 = Rs. 500

Total Rent Expense of B Department will be = 5000 X 2 / 10 = Rs. 1000

Total Rent Expense of C Department will be = 5000 X 7 / 10 = Rs. 3500

--------------------------------------------------------------------------------

Total Rent = Rs. 5000
=====================================================

From above example, it is clear total overhead cost will be apportioned to different department on some basis. Basis of Rent apportionment is the area of department.

All Service department's cost is also reapportioned to the production department. For example, we have store department. Its store service cost is Rs. 1000. A department has consumed 4000 units. B department has consumed 6000 units. So,  store service department cost will be reapportioned on the basis of material consumed by different department.

A Department's Store service cost = 1000 X 4 / 10 = Rs. 400

B Department's Store service cost = 1000 X 6/10 = Rs. 600

Following is the list of basis of apportionment.

S. No.  Name of Overhead  Basis of Apportionment
1 Rent, rates and taxes  Area of Department
2 Repair to Plant or Department, Depreciation Plant or Department's Value or any asset's value
3 Light and electricity Area of Department or Units of Sub-meter in Department
4 Power H.P. Of Plant
5 Supervision, Employer's liability  No. of Employees
6 Fire Insurance Value of Stock in any Department
7 Maintenance Expenses Duty Hours in any  Department
8 Indirect Labour Cost Total duty hours in any department
9 Canteen Service Cost and other welfare expenses  No. of Employees in Any Department
10 Transport Cost No. of boxes or containers or weight of containers, hours of spending vehicle in any department
11 E.S.I.  Wages of Each Department
12 Store Service Expenses Value of Material Consumed



http://www.krantikari.org/2016/09/cost-accounting-ebook.html

COMMENTS


Name

access,2,account,87,accountant,92,Accounting,679,accounting definitions,99,accounting ebook,3,Accounting education,85,accounting procedure,2,accounting process outsourcing,2,Accounting Software,54,advance,3,advertising,6,africa,7,Amalgamation,6,amendments,16,announcements,61,Annuity,2,assets,51,audit,46,auditing,41,Australia,2,B.Com.,22,balance sheet,80,bank,111,Bank reconciliation,12,banking,33,basic accounting,110,BBA,1,benefits,13,best,50,bill,12,black money,3,blog,12,bloggers,7,book keeping,4,bookkeeping,2,Branch Accounting - full tutorial,8,budget,35,Budget variance,13,business,65,businessman,9,CA,29,calculator,4,canada,3,capital,72,capital budgeting,27,career,20,cash,40,cash book,8,cash flow statement,8,Chiense,1,children,13,china,6,class,3,coaching,2,coins,2,college,6,commerce,10,commerce students,7,company,36,computer,9,computer accounting,1,conference,4,Contact vinod kumar,1,Control Your Spending,27,corporate accounting,69,cost,159,cost accounting,194,cost center,8,cost centre,1,CPA,2,credit,18,credit card,10,cs,10,currency,35,data,11,Debit and credit,16,debit cards,1,debt,62,debtor,21,degree,6,depletion,2,depreciation,38,Diwali Messages,12,documents,4,dollar,5,domain,3,Downloads,3,Dubai,1,e-accounting,17,earning,17,education,246,Education Loans,6,email,15,employee,4,EPF,2,ERP,7,euromoney,1,examination,7,excel,17,excise duty,6,expenses,65,facebook,7,factor of loan,1,fans,2,feature,32,fifo,5,FII,4,fiji,1,finacle,1,finance,822,Finance Journal Entries,4,Financial,134,financial accounting,144,fire insurance,3,flickr,2,flow,4,forensic,4,forex,21,formula,8,france,1,fraud,6,free,2,fun,34,function,1,fund,48,GAAP,36,GDP,1,gdr,5,germany,1,gold,7,goodwill,4,goodwill accounting,3,google,34,google apps,3,google apps,1,google base,1,google buzz,1,google calendar,1,Google docs,38,google finance,3,google fusion tables,1,google talk,5,govt.,5,GST,33,guide,85,health,6,Hindi,2,Hindi Language,3,history,3,holding company,3,How to treat FBT in Tally 9,1,HRA,3,ICAI,11,ICAWI,3,ICICI Bank,1,IFRS,10,income,17,income statement,16,Income Tax,7,India,57,indian railway,1,Indonesia,1,inflation,4,inflation accounting,3,infographics,8,information,7,inspiration,175,insurance,14,insurance accounting,2,Intangible,3,interest,26,international,7,Internet,41,Introduction of Tally 9,1,inventory,41,investment,135,investment in Shares,6,invoice,3,IT,1,Japan,1,Job costing,4,journal entries,136,Journal Entries eBook Help,4,Kalculate,1,keyboard,3,kuwait,2,laptop,2,law,4,LBT,1,learning,36,lease,5,lecture,11,ledger,15,leducation,1,Leverage Analysis,7,liabilities,16,lifo,3,linkedin,1,loan,74,logical point,1,loss,5,loss of profit,1,M.Com.,5,m.phil,2,malaysia,3,management accounting,129,manual accounting,4,manufacturing account,1,market,11,marketing,3,mastercard,2,material,13,MBA,14,MCA,1,media,4,migration,2,mobile,9,money,61,ms word,3,ms. excel,14,multi currency in tally 9,1,Multicurrency Accounting,3,mutual fund,30,national security,1,new and sacrifice ratio,1,new york times,1,new zealand,1,news,1,NGO,5,nonprofit-accounting,6,North Georgia Mountains,1,Notification,1,NPV,17,NSE,1,odbc,2,office,10,oman,1,online application,2,online accounting,11,Online Accounting Course,4,otcei,1,pakistan,3,parents,3,Partnership,1,pay pal,3,pdf,4,Personal Finance,6,pie chart,1,pie chart of income,2,pnb,5,podcast,1,ppf,1,presentation,10,price,7,privacy policy,2,prof. vinod kumar,13,profit,24,profit and loss account,12,project management,11,provision,13,purchase,9,puzzles,2,quickbooks,2,Quote,22,quotes,42,quotes of svtuition,1,rating agency,2,ratio analysis,34,RBI,7,readers,13,real estate,13,rectification of errors,11,remote control,2,reports,10,reserves,8,responsibility accounting,4,retirement,2,revenue,3,Revenue reserves,2,review,7,risk,11,rupees,9,salary,5,sale,12,saudi arabia,1,saving,19,sbi,9,scholarship,2,school,1,SEBI,13,security,30,service tax,23,share,20,share trading,15,Shares,16,shri lanka,3,singapore,2,sms,6,social accounting,7,society,5,solution,214,South Africa,1,stock,24,stock exchange,22,structure,6,student,39,students,69,study,21,subsidiary company,2,svtuition,13,swiss bank,2,tally,99,tally 9,8,Tally 7.2,8,Tally 9,42,Tally.ERP 9,59,tanzania,2,tax,94,Tax Accounting,30,TDS,15,teacher,62,teaching,112,technology,33,test,40,testimonial,15,testimonials,15,thailand,1,tips,60,trading,5,trading on equity,2,transaction,7,trend,12,trial balance,13,truthfulness,1,tuition,3,twitter,10,UAE,5,UGC - NET Commerce,13,UK,11,United Arab Emirates,1,university,9,usa,25,valuation,8,VAT,22,Video,35,Voucher and vouching,4,Wealth,8,wikipedia,25,working capital,29,youtube,14,
ltr
item
Accounting Education: How to Apportion Overhead Costs
How to Apportion Overhead Costs
https://1.bp.blogspot.com/-Q06VwgtSFpk/WU7dnoSPl-I/AAAAAAAAVas/2raH4vBL9E8l9tnbyyR9q17Q--qtBO7vgCLcBGAs/s1600/cost%2Baccounting%2Bebook%2Bpromotion.PNG
https://1.bp.blogspot.com/-Q06VwgtSFpk/WU7dnoSPl-I/AAAAAAAAVas/2raH4vBL9E8l9tnbyyR9q17Q--qtBO7vgCLcBGAs/s72-c/cost%2Baccounting%2Bebook%2Bpromotion.PNG
Accounting Education
http://www.svtuition.org/2012/10/how-to-apportion-overhead-costs.html
http://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2012/10/how-to-apportion-overhead-costs.html
true
2410664366776677676
UTF-8
Loaded All Posts Not found any posts VIEW ALL Reply Cancel reply Delete By Home PAGES Contents View All RELATED CONTENTS FOR YOUR LEARNING Topic ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS PREMIUM CONTENT IS LOCKED STEP 1: Share to a social network STEP 2: Click the link on your social network Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy