Q.Continuing from the primary distribution in Question 8 (Dept A ₹3,100, Dept B ₹2,200, Service Dept S ₹900), the service department S serves the two production departments A and B in the ratio 2 : 1. Prepare the secondary distribution summary and show the final overhead of each production department.

The service department does not make the product, so its ₹900 is reapportioned to the two production departments in the ratio of service given (2 : 1), leaving S with nil.

Since S serves A and B in 2 : 1, A takes two-thirds and B one-third of ₹900, which are then added to their primary totals.

In secondary distribution the service department's cost is transferred to the production departments on the basis of service given — here the ratio 2 : 1 between A and B.

Reapportion S's ₹900 in the ratio 2 : 1 (total 3 parts):

• To A = 900 × 2/3 = ₹600
• To B = 900 × 1/3 = ₹300

Secondary distribution summary (direct redistribution method):

The service department now shows nil, and the whole ₹6,200 of factory overhead rests in the two production departments (3,700 + 2,500 = 6,200), which is exactly the position needed before overhead can be absorbed into products.

Dual-solve check: the total overhead must be conserved by secondary distribution — it only moves cost between departments, it does not create or destroy any. Primary total = 3,100 + 2,200 + 900 = ₹6,200; final total = 3,700 + 2,500 + 0 = ₹6,200. The two totals agree, and the amounts added to A (₹600) and B (₹300) sum to exactly the ₹900 removed from S, confirming the reapportionment.

A common error is to reapportion S's cost on floor area or machine value (the primary bases) instead of on the basis of service actually given (2 : 1). Another is forgetting to reduce the service department to nil, or splitting the ratio the wrong way round (giving B the larger share).