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What is the procedure for charging overheads?
There are three ways of charging overheads:
- Primary Apportionment is the first step in charging total overheads to the individual departments.
- Secondary Apportionment is the next step after primary apportionment where the overheads of non production departments are transferred to the production departments.
- Absorption is the third step where each job or product gets the loading of the overheads while it is moving through the production department. It is also known as recovery of overheads
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