Worked example
With 3,000 of freight allocated by weight across groups weighing 1,000, 600 and 400 units of weight, the groups receive 50%, 30% and 20% of the freight cost respectively.
Frequently asked questions
Which allocation basis should I use?
That depends on the purpose of the analysis and your accounting policy. Weight or volume can approximate transport usage, while quantity or value may suit other internal allocation methods.
Does this replace an accounting policy?
No. It is a calculation aid. Use the allocation method required by your organization, accountant or reporting standard.