Methods of Re-apportionment (step method or non-reciprocal)

 What is apportionment? 

Apportionment refers to distribution of overheads among or between other departments. If there is any overhead expense which is related to more than one department are required to be distributed between or among other departments.

What is re-apportionment? 

Now here, service departments do not directly contribute in the production of goods or products. Therefore it is necessary to assign overheads of Service Department to Production department.

 So the process of assigning Service Department(s) overheads to the production departments is called Re-apportionment or Reassignment.

At this stage all the overheads of factory are collected under production department. 

Step Method or Non-reciprocal Methord 

In this methord the cost is apportioned from one service department to other service departments, as well as other departments too but in a sequential order. (Sequence is important)

Therefore as compared to Direct Re-distribution Methord this methord is more complicated as we have to follow sequence of apportionment. 

The service department which serves or renders maximum numbers of services to other departments will begin the sequence. 

In other words, the Service Department which render the largest number of servies to other service departments or production departments is Distributed first. 

The process continues till the cost of last service department is fully distributed.

And cost of last service department is apportioned among production department(s) only.

(While some authors believe that service departments having the most expenses should be distributed first.)

                    X.X.X.X.X..X.X.X.X.X.XX.XX.X.X.XX.XXX.XX.X.X.X.X