Cost Allocation Spreadsheet Template
I have a simple guide to help you out if you are STRUGGLING WITH ALLOCATING COSTS TO MULTIPLE PRODUCTS ☺️✅
When you buy a variety of goods and incur extra expenses like transportation, loading, branding, storage, etc. here's how you can fairly distribute these costs using the value-based method:
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1. List All Costs: Tally up all additional expenses (e.g., transportation, storage). Let's say it's ₦100,000.
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2. Determine Total Value: Add up the purchase price of all items. Suppose the total value is ₦500,000.
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3. Allocate Costs by Value: Calculate the proportion of each item’s value to the total value, then apply this proportion to the total.
Here's an example:
- Item A: ₦100,000
- Item B: ₦150,000
- Item C: ₦250,000
Total Value = ₦500,000
Proportional Cost Allocation:
- Item A: (₦100,000 / ₦500,000) * ₦100,000 = ₦20,000
- Item B: (₦150,000 / ₦500,000) * ₦100,000 = ₦30,000
- Item C: (₦250,000 / ₦500,000) * ₦100,000 = ₦50,000
This way, you ensure each item bears its fair share of the extra costs, helping you price your products accurately. 📊
₦10,000.00