Treating Administrative Overheads as a separate addition to Cost of

This method considers administration as a separate function like
production and sales and, as such costs relating to formulating the policy, directing the
organisation and controlling the operations are taken as a separate charge to the cost of
the jobs or a product, sold along with the cost of other functions. The basis which are
generally used for apportionment are :
(i) Works cost
(ii) Sales value or quantity
(iii) Gross profit on sales
(iv) Quantity produced
(v) Conversion cost, etc.