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into account on reciprocal basis. The following are the three important methods available for dealing with reciprocal distribution: Simultaneous Equation Method. Repeated Distribution Method Trial and Error Method. (4) Simultaneous Equation Method: Under this method, the true cost of total overhead of each service department is ascertained with the help of Simultaneous or Algebraic Equation The obtained result reapportioned to production department on the basis of given percentage. (5) Repeated Distribution Method: Under this method, the total overhead costs of the service departments are distributed to service and production departments according to given percentage of the service departments are exhausted, in tum repeatedly until the figures become too small to matter. (6) Trail and Error Method: In this method, the cost of a service centre is apportioned to another service centre. Then, the cost of another service centre along with the apportioned cost from the first centre is again apportioned back to the first service centre. This process is repeated fill the amount to be apportioned becomes zero or negligible S 10 Mustration: 5 The following particulars related to a manutacturing company has three production departments: P, Qand Rand two service departments X and Y: Production Departments: Rs2,000 Rs.1.500 Rs.1,000 Service Departments (c) Rs. 500 (1) Rs. 400 The service department expenses are charged on a percentage basis as follows: Productions Service Departments Departments Service Depts: GRS T 10 S T 20% 30% 40% 20 30% 30% 20% * Prepare a statement showing the distribution of the two service departments expenses to three production departments under (1) Simultaneous Equation Method and (2) Repeated Distribution Method

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