CAF-5 · Chapter 2 · Question 3 of 10
When apportioning production overheads across different departments, which of the following bases is the most appropriate for distributing 'Factory Rent'?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Floor area occupied
Explanation
Overhead apportionment requires a logical basis linking the cost to the department. Factory rent is apportioned based on the physical space (floor area) occupied by each department.
More Overheads MCQs
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- Q6Total factory depreciation for the year is budgeted at Rs. 150,000. The total equipment cost for Department A, B, and C is Rs. 200,000…
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- Q9A company absorbs overheads at a predetermined rate of Rs. 25 per machine hour. During the period, actual machine hours worked were 4,000…