Which of the following is a common base to distribute the cost of building depreciation to responsibility centres?
A) Number of employees in responsibility centre
B) Budgeted sales dollars in responsibility centre
C) Square metres of space occupied by responsibility centre
D) Budgeted direct costs of operating the responsibility centre

Question

Quizplus · Accepted Answer

The most common base to distribute building depreciation costs is the square metres of space occupied by each responsibility centre. This is because the space each centre occupies is directly related to the wear and tear on the building. The other options listed (number of employees, budgeted sales dollars, and budgeted direct costs) may not accurately reflect each centre's impact on the building's depreciation.

Which of the Following Is a Common Base to Distribute