Allocation:
- Allocation means the allotment of whole items of cost to cost centres or cost units.
- It deals with the whole items of cost.
- Cost is directly allocated to any cost centre or cost units.
- Cost is allocated when the cost centre uses whole of the benefits of the expenses.
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Apportionment:
- Apportionment means allotment of proportion of items of cost to cost centres or cost units.
- It deals with only proportion of items of cost.
- It needs a suitable basis for subdivision of cost by cost centres or cost units. Thus it is indirect process of allotment.
- Cost is apportioned when cost centres use only a proportion of the benefits of the whole expenses.