Stepdown method of Re-apportionment.

[Kristofor]

Hi,<BR><BR>Can anyone tell me how the stepdown method of re-apportinment works? Its a question i need to answer before i can complete my RCI simulation.<BR><BR>Many Thanks

[Andy]

The step down method of reapportionment is usually used when some service cost centres serve more departments than others.<BR><BR>For example, consider a company with 3 production departments (Fabrication, Assembly and Finishing) and 2 service departments (Maintenance and Stores).<BR><BR>Maintenance serves all four other departments<BR>Stores serves only the production departments<BR><BR>The step down method starts with Maintenance, and reapportions its overheads to all four other departments. This results in an increase in Stores overheads, which are then reapportioned to Fabrication, Assembly and Finishing.<BR><BR>The step down name comes from the fact that you are reapportioning to one less department at each step.<BR><BR>Hope that helps!

[Kristofor]

That's brilliant. It's brought it all back to me now.<BR><BR>Many Thanks