What does Allocation mean? | Push Digits Chartered Accountants



What is Allocation?

It refers to the process of dividing up or assigning costs or resources. For example, calculating depreciation is an allocation process in which the cost of an asset cost is assigned to expense in each of year in which the asset is expected to be used by the company. Manufacturers assign fixed overhead costs such as factory rent to a product based on the number of products produced in the factory.


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