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Could you explain for me 2 terms which are “Allocated costs” and “General costs”?
Regarding “general costs”, I understand how it is calculated
But “Allocated costs” is available on a exercise but I dont know how it is calculated.
Allocated costs are the costs allocated/applied to each department. For example if there is a Department A and if the manager of that department is paid $10,000, then the $10,000 is allocated as a cost of Department A.
I do explain this in my free lectures on the allocation, apportionment, and absorption of overheads.
I’ve watched your lectures. I’d like to make sure that I understand right about 2 terms
Allocated costs that we know exactly a cost which department is applied to.
General costs that we don’t know exactly how much cost applied to each department therefore we apportion the general costs for each department base on a appropriate basic such as floor, labour hours, etc.Anyway thank you for your help, sir.
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