What is the basis of apportionment for stores?

What is the basis of apportionment for stores?

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. This happens when an overhead can not be assigned directly to one specific cost centre.

What are the principles for apportionment of expenses?

Apportionment is the process of distributing overhead items to cost centers on a fair and reasonable basis. The principle is that if an overhead item cannot be fully allocated to one cost center, it should be apportioned over related cost centers.

What are the bases on which common expenses are apportioned among departments?

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.

How do you find the basis of apportionment?

Calculating apportionment for income

  1. Identify your gross income for the quarter.
  2. Calculate your company’s book value.
  3. Divide your gross income figure by the number of days in the relevant quarter.
  4. Multiply this number by the number of days in the year.
  5. Finally, divide your final figure by the value of your business.

Which of following expenditure is a apportioned on the basis of sales ratio?

Answer. Answer: Sales Ratio must be found out between Pre-incorporation and Post-incorporation period and usually selling expenses or variable expenses are allocated on the basis of Sales Ratio, viz. Advertisement, Godown Rent, Storage, Discount Allowed, Carriage Outwards, Salesmen’ Salaries and Commission, etc.

On which basis canteen expenses are to be allocated?

Such expenditure is charged to canteen expenses and credited by the receipts of the canteen and net expenditure is apportioned to producing cost centres either on the basis of total wages or number of men working in these centres.

Which of following expenditure is apportioned on the basis of sales ratio?

What is apportionment?

Apportionment describes the allocation of a loss between all of the insurance companies that insure a piece of property. Apportionment can refer to real estate or the distribution of economic benefit. Apportionments most often applies when two or more insurance policies are taken out with the same insured party.

How expenses are apportioned in departmental accounting?

Cost apportionment occurs when a specific cost cannot be directly identified with one specific cost center. Any cost that does not belong to one department and is shared by a number of departments will be divided among these departments using apportionment.

Which of the following expenditure is apportioned on the basis of sales ratio?

Which of following expenditure is apportioned on the basis of sales ratio Mcq?

Expenses incurred on selling of goods like discount allowed, bad debts, freight outwards etc. are apportioned on the basis of sales value of each department.

Which are the bases of overhead apportionment?

Following are the main bases of overhead apportionment utilised in manufacturing concerns:

  • (i) Direct Allocation:
  • (ii) Direct Labour/Machine Hours:
  • (iii) Value of Materials Passing through Cost Centres:
  • (iv) Direct Wages:
  • (v) Number of Workers:
  • (vi) Floor Area of Departments:
  • (vii) Capital Values: