Allocation means:

The correct answer is: B. Allotment is the distribution of proportionate items of cost.

Allocation is the process of assigning costs to cost objects. It is a suitable basis for sub-division of the cost by cost centres. Allocation and appropriation are both more or less same. Products, departments or machineries are the basis on which allocation is usually made.

Here is a brief explanation of each option:

• Option A: Allotment of the whole item without division to a particular department. This is not the correct definition of allocation. Allocation is the process of assigning costs to cost objects, not the process of assigning costs to departments.
• Option B: Allotment is the distribution of proportionate items of cost. This is the correct definition of allocation. Allocation is the process of assigning costs to cost objects in proportion to their use of the cost object.
• Option C: It is a suitable basis for sub-division of the cost by cost centres. This is true. Allocation is a suitable basis for sub-division of the cost by cost centres. This is because allocation allows costs to be assigned to cost objects in proportion to their use of the cost object.
• Option D: Allocation and appropriation are both more or less same. This is not the correct statement. Allocation and appropriation are not the same. Allocation is the process of assigning costs to cost objects, while appropriation is the process of assigning resources to cost objects.
• Option E: Products, departments or machineries are the basis on which allocation is usually made. This is true. Products, departments or machineries are the basis on which allocation is usually made. This is because these are the most common cost objects.