CAF-5 · Chapter 2 · Question 6 of 10
Total 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, Rs. 500,000, and Rs. 300,000 respectively. What amount of depreciation should be apportioned to Department B?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Rs. 75,000
Explanation
Depreciation is apportioned based on the book value or equipment cost of the machines in each department. Total equipment cost = 200k + 500k + 300k = Rs. 1,000,000. Department B's share = (500,000 / 1,000,000) × Rs. 150,000 = Rs. 75,000.
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