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Overhead apportionment

Overhead apportionment divides a shared overhead item between cost centres using a reasonable basis reflecting use or benefit. Examples include floor area for occupancy costs and machine value for some insurance costs. The chosen basis should be justified by the facts rather than used mechanically. Apportionment assigns a shared cost; it does not establish that each centre can control or avoid its assigned share.

Worked example

Shared rent is $30,000. Departments occupying 60% and 40% of the floor area receive $18,000 and $12,000 respectively.

Common mistake

An equal split is not automatically fair or causal. Explain why the chosen basis relates to the cost.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA MA Direct September 2026–June 2027
FIA FMA Direct September 2026–June 2027