Allocation and Apportionment of Overheads

  • Jill Collis
  • Roger Hussey
Part of the Macmillan Business Masters book series (PMB)


At some point an organisation may wish to know the total cost of a particular product or service. The records kept of direct costs, such as materials and labour, enable these costs to be identified with specific units. However, an organisation also incurs indirect expenses, such as rent and rates, light and heat, insurance and salaries of supervisors. Some method must be found to charge a fair share of these indirect expenses, known as overheads, to individual cost units to find the total cost of each unit.


Cost Unit Management Account Production Department Overhead Cost Elimination Method 
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Copyright information

© Jill Collis and Roger Hussey 1999

Authors and Affiliations

  • Jill Collis
  • Roger Hussey

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