Overhead expenses include indirect expenses, indirect labor, and indirect materials. Primary distribution involves distributing service department overhead costs directly to production departments based on an equitable apportionment basis. The document provides an example of Kumaresh Ltd, which has production departments A, B, C and service departments D, E. It lists overhead costs and allocation bases and provides departmental details. It then distributes the overhead costs to the departments using the allocation bases to prepare a primary departmental distribution summary.

1. Cost accounting
Overhead:
Overhead expenses are all cost on indirect expenses , indirect labour and indirect
material simply overheads means a total indirect cost.
DISTRIBUTION OF OVERHEADS
Now we can see about primary distribution method.
PRIMARY
DISTRIBUTION
SECONDARY
DISTRIBUTION

2. PRIMARY DISTRIBUTION
 The overheads of service department are distribution directly to the production
department in the given ratio based on apportionment is noting which direct
estimated to the department.

3. Kumaresh ltd has three production department A ‘B ‘ C’ and two service departments ‘D’ and ‘E’ .the
following figures are extracted from the records of the company.
Rent and Rate 5000
Indirect wages 1500
Depreciation of machinery 10,000
General lighting 600
Power 1500
Sundries 10,000

4. Following further details are available
Apportion the cost to various departments on the most equitable basic by preparing a primary departmental
distribution summary.
TOTAL A B C D E
Floor space in square
feet
10,000 2000 2500 3000 2000 500
Light points 60 10 15 20 10 5
Direct wages(RS) 10000 3000 2000 3000 1500 500
H.P of machines 150 60 30 50 10 -
Value of machinery(RS) 250000
0
6000 80000 100000 5000 5000

5. Item Basic of
appostiment
Product
departme
nt
Service
department
TOTAL A B C D E
Rent & rate Floor space 5000 1000 1250 1500 1000 250
Indirect wages Direct wages 1500 450 300 450 225 75
Depreciation
of machine
Value of
machinery
10000 2400 8000 4000 200 200
General
lighting
Light point 600 100 150 200 100 50
power HP of machinery 1500 600 300 500 100 0
sundry Direct wages 10000 3000 2000 3000 1500 500
Direct wages - 2000 - - - 1500 500
Total
overheads
30600 7550 12000 9650 4625 1575

6.  Explaination:
Two different department there one is production department . In production
department there are three department A,B and C, and other service department
in that there are two department D and E.
Basis of apportionment:
 Rent payed based on a floor space.
 Indirect wages can be approached based on direct wages.
 Depreciation of machinery depreciation is basically calculated value of assets.
 General lighting it can be divided as light point , floor area. In air problem light point is available
so we can apporiate it.
 Power apportion for HP of machine.
 Sundries it can be apportion based on direct expense.
 After totaling all department separately now we can check it by cross adding.

7. RESULT:
After incurring all expenses organize at want to find actual expenses incurred for each department
sepeateles.
we hope you can understand this concept

8. THANK YOU
SUBMITTED
BY
G.JANANI
T.SOWNDHARYA