Difference Between Overhead Allocation And Apportionment
The main dissimilarities or difference between allocation of overheads and apportionment of overheads can be described as follows:
1. Meaning
Overheads Allocation: Allotment of entire amount of overhead cost to the specific unit, department or cost center.
Overhead Apportionment: Distribution of overhead costs proportionately to several cost centers or departments.
2. Amount Of Cost
Overheads Allocation: It represents whole amount of overhead cost.
Overheads apportionment: It represents some portion of overhead cost.
3. Basis
Overhead Allocation: Overheads costs assigned on direct basis.
Overheads Apportionment: Costs assigned on proportional basis
4. Applicable
Overheads Allocation: It is applicable if whole overhead cost belongs to single or a specific department or cost center.
Overheads Apportionment: It is applicable in case of different cost centers or units.
Overheads Allocation Vs Apportionment (Comparison Chart)
I hope this post is helpful to understand the difference between overhead allocation and overhead apportionment and to make comparison between them.
Overheads Allocation Vs Apportionment (Comparison Chart)
Basis For Difference
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Overheads Allocation
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Introduction
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Allotment of total overheads to the certain cost center
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Distributing the overhead costs to the different cost centers
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Represents
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Entire overhead costs
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Part of overhead costs
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Assigned
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On direct basis
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On proportional basis
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Applicable
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When total overhead cost is related to a single unit
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When total overhead cost belongs to different units
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I hope this post is helpful to understand the difference between overhead allocation and overhead apportionment and to make comparison between them.
