Re-apportionment

The next stage is to re-apportion the overhead costs of service
departments over production departments. Service departments are those departments
which do not directly take part in the production of goods. Such departments provide
ancillary services. Examples of such departments are boiler house, canteen, stores, time
office, dispensary etc. The overheads of these departments are to be re-apportioned over
the production departments since service departments operate primarily for the purpose of
providing services to production departments. At this stage, all the factory overheads are
collected under production departments.