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CMA Foundation · Fundamentals of Financial and Cost Accounting · Cost, Cost Centre, Cost Unit and Cost Drivers

Sharma Textiles has a stores department (service cost centre) with overhead of ₹60,000. It is apportioned to Weaving and Dyeing on the basis of number of material requisitions: Weaving 450 and Dyeing 150. What is the amount apportioned to Dyeing?

Dyeing receives ₹15,000. Total requisitions are 600, and Dyeing accounts for 150 of them, a one-quarter share. One-quarter of ₹60,000 is ₹15,000. The figure of ₹45,000 is the Weaving share, not Dyeing's.

  1. A₹45,000
  2. B₹30,000
  3. C₹15,000Correct
  4. D₹20,000

Explanation

Total requisitions are 450 + 150 = 600. Dyeing's share is 150/600 = 1/4, so 60,000 × 1/4 = ₹15,000. The ₹45,000 option is Weaving's share, which results from using the wrong department's ratio.

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