Maths Focus: Cost apportionment
13 September 2012
Indirect costs have to be shared (apportioned) between products or departments. In exams, you will be given the costs and enough information to calculate a fair apportionment.
What maths do I need?
You have to calculate usage ratios to apportion costs. So you have to add, divide and multiply.
What do I need to learn?
1 A usage ratio is usage by the department or product divided by total usage.
2 To apportion costs multiply ratio by total cost.
EXAMPLE
A manufacturer makes tables and...