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Allocation Of Expenses In Departmental Accounting

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The expenses which can be specially incurred for a particular departments like salary to salesman, can be charged directly to the department, but the expenses which could not be allocated precisely to a particular department may be divided among the different departments are as follows:

1. Sales Of Each Department
* Salesman's commission
* Discount allowed
* Bad debts
* Carriage Outwards
* Advertisement
* Packing expenses
* Provision for discount on debtors
* Traveling salesman's salary and commission

2. Purchase Of Each Department
* Discount received
* Provision for discount on creditors
* Carriage Inward
* Freight
* Duty


3. Area Of Floor Space Of Each Department
* Rent
* Rates and taxes
* Repair and maintenance Of building
* Insurance on building
* Air conditioning expenses
* Heating

4. Value Of Assets In Each Department
* Depreciation Of Machinery
* Repairs and maintenance of plant
* Insurance premium

5. Number Of Workers
* Workmen's compensation insurance
* Canteen expenses
* Labor welfare expenses
* Time keeping
* Personnel office
* Supervision

6. Direct Wages
* Compensation to workers
* Holiday pay
* Provident fund contribution
* Group insurance premium

7. Number Of Light Points
* Lighting expenses

8. Horse Power Of Machine And /Or Production Hours
* Electric Power

9. Time Devoted By Him For Each Department
* Work manager's salary

Related Topics
Concept And Objectives Of Departmental Accounting
Accounting Procedure In Departmental Accounts
Difference Between Branch And Department
Journal Entry For Inter-departmental Transfers
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