Difference between allocation and apportionment

Difference between allocation and apportionment

1. Allocation

Overhead Costs which are directly identifiable to a cost center are directly allocated. It is important to note that allocation is concept of overhead and must not be confused with the direct measurement.

There are different methods of allocation the cost which i.e. usage , time spent, machine hour etc.

2. Apportionment

Overheads which are not directly identifiable are first charged to general overhead and then those general overheads are apportioned on appropriate bases i.e. area, machine hour etc, then service department apportioned cost are apportioned among production department and finally the production overhead both allocated and apportioned are absorbed using absorbing rate.