Allocation and Apportionment of Overheads

Allocation 

Allocation is the process of charging the full amount of overhead costs to a particular cost centre.ie salary of the sales manager is allocated to the sales department.

ICMA,London defines Allocation as "the allotment of whole amount of cost to cost centres or cost unit.

Apportionment

Apportionment of overhead is the process of distributing those items of overhead (which cannot be allocated to a cost centres or department),between cost centres and departments on an equitable basis.

It is the process of splitting up an item of overhead cost and charging it to the cost centres on an equitable basis.

ICMA,London defines Apportionment as "the allotment of proportion of cost to cost centre or cost units.