Module 9 Overhead Accounting

Question 1

Allocation and apportionment

Answer 1

• “allocation”- overhead cost is readily identifiable with a specific cost centre and is charged to it.
• “apportionment” - overhead costs cannot be readily identified with a specific cost centre, and therefore should be shared between two or more cost centres

Question 2

Typical production departments

Answer 2

• Assembly
• Machining
• Drilling
• Moulding
• Finishing

Question 3

Typical service departments

Answer 3

• Maintenance
• Inspection
• Personnel
• Facilities Management
• Stores
• Canteen

Question 4

Overhead Re-Apportionment

Answer 4

• total service department costs must be re-apportioned, or re-charged, to production departments for both cost control and product costing purposes