For each of the following cost pools select an appropriate allocation base from the list below if the overall cost object is to assign costs to production departments. Each base can be used only once. Assume a manufacturing company.
-Manufacturing machinery cost.
A) Number of employees per department.
B) Machine hours by department.
C) Hours of operation by production department.
D) Operations costs of each department.
E) Indirect labour hours per department.
F) Hours of computer use per month per department.

Question

Quizplus · Accepted Answer

Machine hours by department is the most appropriate allocation base for manufacturing machinery cost because it directly correlates with the use and wear of the machinery in each production department.

For Each of the Following Cost Pools Select an Appropriate