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Apportionment of Overheads
Apportionment of overheads occurs whereas the net value of an overhead item is shared among more or two cost centers that employ the overheads. This is significant that an apportionment basis that reflects the benefit extracted via a cost center is employed. For example here, the rates payable to the local authority may be apportioned on the source of area of occupancy of all cost center.
Re-apportionment of overheads happens when service department costs are charged to user departments. As like an example, the maintenance department overhead costs are summarized and after that charged to the user department, that will probably involve other service or non-production departments. Service departments do not participate directly in the manufacturing process however plays a supportive indirect role. Products do not pass via the support departments. It is for this purpose that service department costs have to be reapportioned to the production cost departments or centers.
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