Final answer:
Reapportioning service cost centres to production cost centres should be done using a systematic allocation method, ensuring costs are allocated fairly based on how the production departments utilize these services.
Step-by-step explanation:
To reapportion service cost centres to production cost centres in a business setting, option C, Use a systematic allocation method, is the appropriate approach. This process ensures that the costs of running service departments are fairly distributed to the production departments that actually generate revenue. An example of this would be allocating the cost of the maintenance department to the production departments based on machine hours used by each production cost center.
It's crucial to choose an allocation base that reflects the use of services by each production cost center. Common bases include floor space for cleaning services, number of employees for human resources, or machine hours for maintenance. Using a systematic allocation method enables accurate product costing, helping the business in decision-making, and performance evaluation of different departments.