Stores keeping cost is best apportioned to producing departments using:
AMachine hours
BFloor area
CDirect wages
DNumber of requisitions
Answer & Solution
Correct answer: D. Number of requisitions
1. Stores keeping cost is driven by the volume of stores movement.
2. The number of material requisitions raised by each producing department is a direct measure of that volume.
3. Floor area or wages do not reflect store activity.
4. Hence requisition count is the appropriate basis.
_Source: ICAI BoS Inter Paper 3, Ch 4 "Overheads", §4.4.1 Table_
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