The total life lie cycle cost divided into m y elements such as initial cost(purchasing, R&D and manufacturing cost), management cost, operational cost, maintenance cost, logistics cost, selling cost, disposal cost. Disposal cost covers functions to be accomplished involving transportation and handling, disassembly, decomposition, processing, and so on. Therefore disposal cost is identified through a functional analysis in the same level of detail as with any other stage in the life cycle. This paper describes the efficient cost allocation index and its application for collecting disposed home appliances-refrigerator, TV, &-conditioner and washing machine. This paper will be effectively utilized for allocating the disposal cost for each municipal government and at the same time, for measurement of life cycle cost for industry concerned.