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Dear John,
hope you’re well. I understand this is not the best question and the only thing I wanna ask regarding this question is that fixed ohds are apportioned on labour hr basis; when I could find a part in the question where it said it should be done as such. I mean fixed ohds can be apportioned by activity level or units. Is there a certain criteria that when a question doesn’t clearly state what the basis are?
would appreciate your response.
Please tell me where you are finding this question. If it is a past exam question then please say which exam. If it is a question in the current edition of the BPP Revision Kit then please tell me the number of the question.
It Is not a past paper question; this question is made up by kaplan to which you said in one of earlier forums “its not a very good question”.
Anyway, If basis of apportionment for Fixed costs are not specified and multiple apportionment basis can be chosen. What basis would be more appropriate is there any tip on this? For instance question has (lab hrs and units both given).
I hope I make sense.Thanks in advance.
I am afraid that I do not have the Kaplan kit (only the BPP kit).
Apart from activity based costing questions, for traditional absorption it will normally be on a labour hour basis. However exam questions do always make it clear what basis to use.
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