apportionment

valentino46

AAArrgghh, its official i dont understand apportionment and allocation at all!!!

john.carter14

It's a right nightmare for sure.

valentino46

in a nutshell its applying costs to cost centres but am i getting my head round it i think not!!! ha ha.
any tips john??

Bookworm55

Which part in particular is bothering you? Is it the difference between the two?

If you could be more specific we might be able to help.

valentino46

hi bookworm,

im struggling with re-apportionment using the step down method. Im under the impression that if a non-cost centre provides a service to a cost centre do we apply the whole cost to the cost centre for the services. sorry if that sounds a bit confusing.

rob

Bookworm55

Rob,

What do you mean by a non-cost centre? Do you mean to differentiate between service cost centres and production cost centres?

All the costs of service centres will have to be allocated to production centres eventually. You apportion (divide) the cost based on the service provided.

valentino46

yes i was a bit confused between cost production cost centres and service cost centres, ive attempted a couple of tasks that are making it clearer, it was the step down apportionment i was having problems with nut have worked out how to calculate.

thanks

SandyHood

I have written a blog on this topic which is planned to be published on 2nd November.
I hope you will find it helpful.