Different basis of allocation
| Sl No. | Cost | Basis of allocation |
| 1 | Interest | (i) Total Capital Employed in in the Department |
| (ii) Square feet of the area occupied | ||
| (iii) Ratio to Sales | ||
| 2 | Insurance | (i) Square feet of the area occupied. |
| (ii) The total value of each asset | ||
| 3 | Taxes | (i) Ratio to sales |
| (ii) Basis of tax | ||
| 4 | Rent | (i) Ratio to sales |
| (ii) Square feet of area occupied | ||
| (iii) No of hours of operation | ||
| 5 | Depreciation | (i) Square feet of area occupied (building) |
| (ii) Value of the asset | ||
| (iii) Life of the asset | ||
| 6 | Telephone | (i) Dept. Metered Usage |
| (ii) No. of extension sanctioned | ||
| (iii) Ratio to sales |
| 7 | Employee’s Benefit | (i) No. of employees |
| (ii) Refer to payroll record | ||
| 8 | Advertisement | (i) Ratio to sales |
| 9 | Light & Power | (i) No. of light/power points |
| (ii) Cubic feet of area occupied | ||
| (iii) No. of hours dept. operate | ||
| (iv) Ratio to sales |
The above-mentioned basis of allocation are some of the basis recommended but a management may adopt altogether a different base for allocation of indirect cost to the different department.