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Dear John,
Could you please tell me what is reallocation in absorption costing?
What circumstances we should reallocate? And on what basis?
How it is related with departments and cost centers?
This is a Paper F2 topic, and the chances of it being asked in Paper F5 are almost impossible.
It is recharging the overheads of service departments in the factory to the production departments for which the service departments are working.
If you want more detail then you need to watch my free Paper F2 lectures on the allocation, apportionment and absorption of overheads – I cannot type them all out here 🙂 (although you would really be wasting your time as far as F5 is concerned.
Thank you John.?. Yes I got your point. I’d better stick with your F5 teaching which covers the examinable areas.
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