In Departmental accounting, there are some expenses which are directly related to the particular department such as raw material, these expenses are allotted to the particular department in which such expenses are conducted. While some expenses are common expenses and are used by every department so it is not possible to make calculations that such expenses belong to a particular department. The best method to allocate such expenses is to allocate such expenses in different departments based on a certain basis. These bases can be determined based upon the nature of its usage. For example rent of the building paid, such expense is the common expenses and it should be allocated among different departments based upon the area of floor used by a particular department. In the above example, usage of grip tape is common expenses whose allocation can not be adjusted in the single department as it is being used in other departments. As Grip tape is part of the product to be packed, so the best allocation is to allocate among different departments is based upon units produced by different departments. In order to have the rightful allocation of such expenses, the nature of the usage of such expenses needs to be considered carefully. If expenses are linked with production then allocation should be done on the basis of units produced or if the nature of the expenses is related with sales, then the basis of allocation among different departments is the sales ratio of various departments.