Cost Apportionment

Cost apportionment is a process of assigning cost elements on the cost object on pro-rata basis when it is not easy to directly trace the cost objects or departments affiliated to the costs.

The assigning is on equitable basis using a common base such as area or time taken to produce or even the number of production runs set.

The overhead items are normally distributed appropriately even a certain percentage may be relied upon.

To achieve this objective an appropriate base is identified so as to apportion the overheads from that point of view


Supper ltd is a paint producing firm which deals with five brands, namely

Brand 1

Brand 2

Brand 3

Brand 4

Brand 5

The following direct costs are associated to each product

Additional information

Factory overhead is $2,500 and it is apportioned to all the brands based on direct labor cost


Apportion the total factory overheads and determine the total cost for each brand



About the Author - Dr Geoffrey Mbuva(PhD-Finance) is a lecturer of Finance and Accountancy at Kenyatta University, Kenya. He is an enthusiast of teaching and making accounting & research tutorials for his readers.