Question

State whether the following statements are true or false: Basis of apportionment of Crèche expense is the number of male employees.

   State whether the following statements are true or false:
Basis of apportionment of Crèche expense is the number of male employees.

Cost Accounting

Cost Accounting

K. Alex 1st Edition

Chapter 8, Problem 8

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" - The basis of apportionment refers to the criterion or method used to allocate overhead costs to different cost centers or departments. It should be logically related to the cause or origin of the cost. Show more…

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State whether the following statements are true or false: Basis of apportionment of Crèche expense is the number of male employees.

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Key Concepts

Expense Apportionment

Expense apportionment is a cost accounting process where common costs are divided among various departments or cost centers based on a relevant measure. This concept ensures that shared expenses are assigned fairly according to the degree of benefit or usage by each segment.

Basis of Apportionment

The basis of apportionment refers to the metric or factor chosen to allocate the shared expense. Selecting an appropriate basis, for instance, number of employees, machine hours, or area occupied, is crucial for ensuring that costs align with actual usage or benefits received.

Crèche Expense Considerations

Crèche expense relates to the costs incurred for providing childcare facilities, often as an employee benefit. The allocation of such expenses should ideally reflect the actual usage or need of the facility (typically linked to the gender most likely to benefit), rather than an unrelated metric, to ensure an equitable distribution of costs.

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