Q.What is secondary distribution of overhead?

Secondary distribution re-apportions service-department overheads onto the production departments.

Overhead distribution has two stages:

• Primary distribution — all overheads are allocated/apportioned across every department, both production and service.
• Secondary distribution — the costs accumulated in the service departments (e.g. stores, maintenance, canteen) are re-apportioned to the production departments on suitable bases, because products pass only through production departments. Methods include the direct method, step (step-ladder) method, and reciprocal methods (repeated distribution/simultaneous equat …