Cost apportionment is the method of charging a proportion of a cost to a cost centre or cost unit because these cost centres or units share in incurring those costs without directly incurring them. A basis of apportionment is always required.
A production overhead absorption rate used uniformly across a factory, often serving as an alternative to calculating a rate for each individual cost centre.
Branch accounting involves an accounting system for separate departments or branches within a business. This system ensures accurate tracking of net profit for each branch, which can be combined to determine the overall profitability of the organization.
A budget centre is a segment within an organization for which budgets are prepared and compared against actual performance as part of the budgetary control process.
Budget Cost Allowance refers to the amount of budgeted expenditure that a cost centre or budget centre is allowed to spend in relation to its budget, with consideration to the actual level of activity achieved during the budget period. It distinguishes between fixed and variable costs to adjust expenditure limits.
A cost centre is an area of an organization for which costs are collected for the purposes of cost ascertainment, planning, decision-making, and control.
A predetermined level of cost expected to be incurred by a specific cost item in the supply, production, or operation of a service, product, process, or cost centre. Cost standards are often applied to performance standards in order to calculate standard overhead costs.
Indirect costs, also known as indirect expenses, are expenses that cannot be traced directly to a product or cost unit and are therefore considered overheads.
