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This was the answer of a question in BPP kit that only production related overhead should be considered while allocation, apportionment and reapportionment of costs. My question is ..if only production related costs should be allocated then why service cost centre costs are also apportioned to production department ?
The service centre costs are the costs of those departments that provide a service to production.
For example, if their is a machine maintenance department, then this is a service department (meaning that it doesn’t actually produce anything) but it is certainly production related because they are in the factory doing work for departments that do actually produce.
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