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> Differences between Cost allocation and apportionment
Cost allocation means identifying a cost centre and charging its expenses in full.
Cost apportionment means allocation of cost to various cost centre using suitable basis
• Allocation means the allotment of whole items of cost to cost centres or cost units.
• It deals with the whole items of cost.
• Cost is directly allocated to any cost centre or cost units.
• Cost is allocated when the cost centre uses whole of the benefits of the expenses.
• Apportionment means allotment of proportion of items of cost to cost centres or cost units.
• It deals with only proportion of items of cost.
• It needs a suitable basis for subdivision of cost by cost centres or cost units. Thus it is indirect process of allotment.
• Cost is apportioned when cost centres use only a proportion of the benefits of the whole expenses.
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