ACCA MA · Chapter 6 · Question 2 of 11
What is the most appropriate basis for apportioning factory rent between cost centres?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Floor area occupied
Explanation
Rent relates to the space each cost centre uses, so floor area is the fairest basis. The number of employees suits costs such as canteen or personnel costs, and machine hours suit machine-related costs such as power.
More Accounting for overheads MCQs
- Q4A factory has two production departments (P1, P2) and two service departments (S1, S2). Overheads after primary apportionment are P1…
- Q5A department's budgeted overheads are $360,000. Budgeted activity is 24,000 direct labour hours and 12,000 machine hours. Work in the…
- Q6Budgeted production overheads were $360,000 and budgeted labour hours were 24,000. Actual overheads were $372,000 and actual labour hours…
- Q7Which of the following would cause production overheads to be under-absorbed?
- Q8A company absorbs production overheads on machine hours. Budgeted machine hours were 30,000. Actual overheads were $496,000, actual…