CA Inter P4 · Chapter 4 · Question 5 of 11
The most appropriate basis for apportioning canteen expenses among production and service departments is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Number of employees in each department
Explanation
Canteen facilities are used by employees, so the benefit received by each department is best measured by the number of employees working there. Floor area suits rent and building maintenance, while the value of plant suits insurance and depreciation of machinery.
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