Question about accounting for overheads: Direct and Step down method.

The direct method is the name given to the way we recharge the overheads of service departments to production departments, when the service departments do not do work for each other.

The step-down method is where one service department does work for another service department (as well as production departments) but the other service department only does work for production departments.

Where one service department does work for another, but the other also does work for the first service department, then it is reciprocal method (which you can do either by repeated distribution or using the algebraic method – both give the same answer).

Some books use the words differently, but they should not do. What is needed for the exam is what I go through in the lectures, and you will find the following article by the examining team useful for revision:

https://www.accaglobal.com/ubcs/en/student/exam-support-resources/fundamentals-exams-study-resources/f2/technical-articles/re-apportionment-of-service-cost-centre-costs.html

Your Revision Kit is fine to use – the syllabus has not changed.

Because it takes into account the fact that the departments are doing work for each other.