Transport cost allocation

[Rudrayani Shedjale]

Hello

product cost is ₹ 150000/-.We had to incur transport cost of ₹ 4000/-for the same.Invoice includes total number of 500 products of different prices each. First one is 10 pcs of ₹ 290/- each.if I want to allocate transport cost to each product which is the correct method I should follow?

[CSSANJAY MALHOTRA]

Allocate on the product wise sales value...

[Rudrayani Shedjale]

Sir,means I should get the percentage like 4000 transport for 150000 then how much for 100 & it will come 2.67 which I should add in each product cost?

[CSSANJAY MALHOTRA]

Yes you are correct

[Rudrayani Shedjale]

Thank you sir.

AI Summary

Cost allocation: allocate transport costs proportionally to product sales value to adjust unit product cost accordingly. Allocate the transport charge pro rata by product sales value: compute the transport charge as a percentage of the total invoice value, apply that percentage to each product line to derive each product's transport share, then add the allocated amount divided by the line quantity to each product's unit cost.