Reciprocal Costs involve the apportionment of costs between service cost centers and production cost centers in a mutually interactive manner. This ensures that the costs of support services are accurately allocated to the production activities, allowing for precise cost control and financial analysis.
Learn about the concept of a Service Cost Centre in accounting, an essential element in the absorption costing process used for allocating or apportioning costs to support and maintain production processes.
A service department, also known as a service cost centre, is a division within an organization that provides essential services to other departments but does not directly produce goods. These departments indirectly contribute to the organization's overall productivity by supporting operating departments.
A support cost centre refers to a department or unit within an organization that provides essential services to other departments, enabling them to operate smoothly and efficiently without directly contributing to the final product or service.
