Apportion means to assign cost based on a predetermined formula. For example, we would apportion a cost pool if the assignment of the cost was based on fixed amounts (e.g.,10 percent to cost objective one and ninety percent to cost objective two) or a three factor formula (e.g., a weighted average of sales, payroll, and asset value). In both cases the assignment of the cost is based on some predetermined method.
Allocation means to assign cost on a rate or factor bases that attempts to assign cost using an allocation base that best measures a causal or beneficial relationship between the cost pool and the final cost objective.(e.g., direct labor hours, machine hours, etc.),
The following are the differences between allocation and apportionment. 1. Allocation costs are directly allocated to cost centre. Overhead which cannot be directly allocated are apportioned on some suitable basis. 2. Allocation allots whole amount of cost to cost centre or cost unit where as apportionment allots part of cost to cost centre or cost unit. 3. No basis required for allocation. Apportionment is made on the basis of area, assets value, number of workers etc.
Direct cost is cost of product while direct costing is the process which study or accounts the direct cost allocation to products.
allocation rate=cost pool amount/ cost driver volume
no
difference between cost and costing
The following are the differences between allocation and apportionment. 1. Allocation costs are directly allocated to cost centre. Overhead which cannot be directly allocated are apportioned on some suitable basis. 2. Allocation allots whole amount of cost to cost centre or cost unit where as apportionment allots part of cost to cost centre or cost unit. 3. No basis required for allocation. Apportionment is made on the basis of area, assets value, number of workers etc.
One can use 4 methods of Cost Allocation in Healthcare Finance:1. Direct Method2. Step-Down Method3. Double Apportionment Method4. Reciprocal Method
If the cost can be tracked towards a cost object, then it is called overhead absorption. If the cost can not be tracked with respect to a specific cost center or cost object, then the entire cost is distributed to all the cost centers, based on the usage ratio. This is called Overhead apportionment. UdhayAnand AVB
Primary distribution overhead cost is also called Departmentalization of overheads. It involves apportionment and allocation of overhead costs in the service and production departments.
Direct cost is cost of product while direct costing is the process which study or accounts the direct cost allocation to products.
allocation rate=cost pool amount/ cost driver volume
no
difference between cost and costing
An important point to remember is that the principles of allocation are the same for for-profit and not-for-profit organizations. The only difference is that the cost objects will be dissimilar.
Cost objectives determines the cost allocation. It determines the product, service or department that will receive the allocation.
Yes, it is. When used for allocating costs, a cost driver is often called a cost-allocation base
whats the difference between cost and list?