Apportionment refers to the distribution or allocation of income, expenses, property, or tax liability among different entities, individuals, or states. It is a concept widely used in fields such as accounting, taxation, and real estate.
Cost apportionment is the method of charging a proportion of a cost to a cost centre or cost unit because these cost centres or units share in incurring those costs without directly incurring them. A basis of apportionment is always required.
Cost apportionment, a vital concept in accounting, involves the distribution of costs across various departments, products, or periods based on specific criteria. This ensures that expenses are accurately allocated, enabling precise financial tracking and reporting.
Indirect costs, also known as indirect expenses, are expenses that cannot be traced directly to a product or cost unit and are therefore considered overheads.
An Overhead Analysis Sheet, also known as an Overhead Distribution Summary, is used to allocate manufacturing overhead costs to various cost centers within an organization using appropriate allocation or apportionment techniques.
