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Important Aspect Regarding to Service Cost Centres
The basis selected should be one that is judged to be the mainly equitable way of sharing the service costs of department over the departments that use the service. Because that a particular and unique basis of apportionment may have to be derived. This must reflect the employ made of the services provided.
Where possible, service department costs must be charged directly that is allocated. As an example for, this would be maintenance wages and materials. While a maintenance job is done for a department, the materials and wages employed would be charged directly to the department concerned. In this way merely unallocated service department costs require to be apportioned.
A machine originally had an estimated useful life of 5 years, but after 3 complete years, it was decided that the original estimate of useful life should have been 10 years. At tha
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Following figures are taken from annual budget of ABC manufacturers for the year 2013: Fixed factory overhead Rs. 4,000,000 Factory overhead absorption rate Rs. 70 per direct labor
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