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I have two queries:
1. In a case where NBV or the cost of the equipment is not given, should I use Floor Space or Machine hours as a basis to apportion Depreciation.
2. The break even point for “under” 800units and the BEP for 800units and over is given. If the question states Draw a Breakeven Chart for “UP TO” 800 units. which breakeven point should I use to draw the chart.
Awaiting a swift Response
Thanks
1. You wouldn’t choose to use either – it would make no sense. Any exam question would either give you a sensible basis for apportioning, or would specifically tell you what basis to use.
2. You cannot be asked to draw a break-even chart in Paper F2 (it was removed from the syllabus ages ago and is now only asked in Paper F5)
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