Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

cossting overhead problem

@@@@P$$$$ (CA final student) (244 Points)

06 August 2009

whats different in absorbtion allocation and apportionment and reapportioment in context of overhead costing???????????pls help to explain this topic

Reply
Follow
Share

3 Replies

Bonita (trainee) (218 Points)
Replied 06 August 2009

re:

whats different in absorbtion allocation and apportionment and reapportioment in context of overhead costing???????????pls help to explain this topic

under OH are all the indirect cost that can not be directly identified with the cost unit. so the total cost is absorbed by the units at a predetermined rate. This predetermined rate is total overheads cost divided by the normal capacity . Now this predetermined rate is multiplied by the actual units . the difference is either underabsorption or over absorption.(actual-total fixed oh).

allocating is like identifying the cost withits respective department..

apportionment is like distributing the oh cost on some suitable basis to all the departments

reapportionment is like redistributing the total cost of all the service dept to the production dept...on the basis mentioned...

Upgrade to CAclubindia Pro. Subscribe Now!

(Guest)

allocation means allotment of overhead to a particular product.Absorbtion is the process of charging OH to output.for ex rent is allocated on area sqarefeet, power is allocated on light points,kws,deprecitaion is allocated on value of machinery.

Dipak Kumar (CA Final Student) (44 Points)
Replied 06 August 2009

Originally posted by :parth
"	whats different in absorbtion allocation and apportionment and reapportioment in context of overhead costing???????????pls help to explain this topic	"