Selling overhead is best apportioned on the basis of:
AFloor area
BDirect labour hours
CMachine hours
DSales value
Answer & Solution
Correct answer: D. Sales value
1. Selling activities are driven by sales effort, which scales with sales realised.
2. Sales value is therefore a defensible basis for distributing selling overhead.
3. Direct labour hours or machine hours relate to production, not selling.
4. Hence sales value is the appropriate apportionment base.
_Source: ICAI BoS Inter Paper 3, Ch 4 "Overheads", §4.8 ¶3_
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