Indirect materials can be apportioned on the basis of ________.

direct material
prime cost
direct labour hour
machine hour

The correct answer is D. machine hour.

Indirect materials are materials that are not directly associated with the production of a product. They are often used in the production process, but they are not a significant part of the cost of the product. Indirect materials can be apportioned on the basis of machine hours because machine hours are a good measure of the amount of production that has taken place.

Option A, direct material, is incorrect because direct materials are directly associated with the production of a product. They are a significant part of the cost of the product and should not be apportioned.

Option B, prime cost, is incorrect because prime cost is the sum of direct materials and direct labor. It does not include indirect materials, so it is not a good basis for apportioning indirect materials.

Option C, direct labor hour, is incorrect because direct labor hours are a good measure of the amount of labor that has been used in the production process. However, they are not a good measure of the amount of production that has taken place. For example, if a machine is idle for some time, the direct labor hours will still be counted, even though no production has taken place.

Therefore, the correct answer is D. machine hour.

Exit mobile version