Cost apportioning

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2014 Hi,

I have a situation as below and need to apportion the overhead costs.

The question is, I have four service intangible products and I have to apportion the Overheads to each of the four products. The type of service and its nature is not similar to each other.

How do I apportion the overhead costs to these products.

Appreciate if anybody can help.

Thank you.

P V Ram

P V Ram (Expert)
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23 January 2014 OHs can be apportioned in a variety of ways depending on the product / service. Some of the bases are:

- Value of the service
- Cost of the service
- Direct labour hours of service
- Direct + indirect labour hours of service etc.

There is no hard and fast rule and it has to be decided on case to case base in a logical way.

Ofcourse, you need to do primary apportionment / allocation and secondary apportionment / allocation.

Thanks!