Wren Ltd management accountant is currently considering the most appropriate basis for apportioning the company's indirect production overheads between its three principal production cost centres - Machining, Assembly and Finishing.. Of the following basis for apportioning the costs of running the factory canteen is the most appropriate?

Question

Quizplus · Accepted Answer

Apportioning factory canteen costs based on the number of employees is most appropriate as it directly relates to the number of individuals using the canteen facilities and is a more equitable method of allocation compared to the other options. Machinery net book value and finished stock value are not directly related to canteen usage, and the number of items produced may not accurately reflect the number of employees using the canteen as some processes may require more time per item.

Wren Ltd Management Accountant Is Currently Considering the Most Appropriate