CMA Intermediate · Cost Accounting · Overheads
Which basis is most appropriate for re-apportioning the cost of the Canteen service department to other departments?
Canteen costs are best re-apportioned on the number of employees in each department, because the service benefits people and usage rises with headcount. Floor area, machine hours and material value relate to other services such as maintenance or stores.
- ANumber of employees in each departmentCorrect
- BFloor area occupied
- CMachine hours worked
- DValue of materials issued
Explanation
Canteen benefit is consumed by people, so the number of employees (or meals taken) reflects the benefit received. Floor area suits building maintenance, machine hours suit power or machine-related costs, and material value suits stores handling.
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