Table of Contents
- 1 What is the basis of apportionment?
- 2 How do you find the basis of apportionment?
- 3 Which of the following is basis of apportionment for power?
- 4 What is the objective of the apportionment?
- 5 What is the basis of apportionment for telephone charges?
- 6 What is meant by the term apportionment?
- 7 When do you use the basis of apportionment?
- 8 When to use Division and apportionment of expenses?
What is the basis of apportionment?
Basis for Apportionment The basis used for apportionment of costs is the number of cost centres when the expenses are to be shared equitably between them. The costs are proportionately assigned to different departments when the overhead belongs to various departments.
How do you find the basis of apportionment?
Calculating apportionment for income
- Identify your gross income for the quarter.
- Calculate your company’s book value.
- Divide your gross income figure by the number of days in the relevant quarter.
- Multiply this number by the number of days in the year.
- Finally, divide your final figure by the value of your business.
How do you determine which suitable basis to be used in apportioning an overhead cost?
This principle states that the apportionment of common overhead items should be based on the actual benefit received by the respective cost centers. This method is applicable when the actual benefits are measurable. For example, rent can be apportioned based on the floor area occupied by each department.
What are the methods of apportionment of overheads?
Methods of Apportionment of Service Department Overheads
- (a) Step-Ladder Method:
- (b) Inter-Service Departmental Mutual Allocation System (Simultaneous Equation Method):
- (c) “Cycles” Methods or Repeated Distribution Method:
- (d) Trial and Error Method:
Which of the following is basis of apportionment for power?
horse power of machines
Most appropriate basis for the apportionment of power is horse power of machines.
What is the objective of the apportionment?
Apportionment measures the population so that seats in the U.S. House of Representatives can be correctly apportioned among the states.
What is time apportionment basis?
What is Time Apportionment Relief? Time apportionment relief is used to reduce a UK chargeable gain. It allows the chargeable gain to be proportionately reduced by the amount of time the plan owner has been resident outside the UK, during the term of the plan.
What is the basis of apportionment for depreciation?
Explanation: Machine depreciation is apportioned to all departments on the basis of machine value. Indirect labour costs are allocated directly to all departments based on the indirect labour budget for each department.
What is the basis of apportionment for telephone charges?
In the above analysis telephone charges have been apportioned on the basis of floor area. (4) Apportioned on the basis of direct labour hours.
What is meant by the term apportionment?
: to divide and share out according to a plan especially : to make a proportionate division or distribution of Representatives are apportioned among the states.
What is the basis of apportionment of welfare department expenses?
The total number of workers working in each department is taken as a basis for apportioning overhead expenses amongst departments. Where the expenditure depends more on the number of employees than on wages bill or number of labour hours, this method is used.
What does apportionment mean in law?
The legal term apportionment (French: apportionement; Mediaeval Latin: apportionamentum, derived from Latin: portio, share) means distribution or allotment in proper shares. It is a term used in law in a variety of senses.
When do you use the basis of apportionment?
The basis used for the apportionment of costs between a number of cost centres when the costs are to be shared between them equitably. This occurs when an overhead cannot be directly assigned to one particular cost centre.
When to use Division and apportionment of expenses?
Such expenses require division and apportionment over two or more cost centres or units. So cost apportionment will arise in case of expenses common to more than one cost centre or unit.
Why is allocation and apportionment of overheads important?
Allocation andapportionment of overheads and then absorption of overheads helps for finding total cost of production for better decision making for cost control and cost reduction.
Why do we need to do cost apportionment?
Cost apportionment arises because most overheads incurred do not arise solely from the existence of a cost centre. For example a supervisor can be responsible for more than one cost centre hence the need to do the apportionment of his payroll or payroll additives.