The number of hours that a department uses equipment and machinery is a reasonable basis for allocating depreciation

Finance Nov 24, 2020

The number of hours that a department uses equipment and machinery is a reasonable basis for allocating depreciation. True or False True False

Expert Solution

Answer is TRUE , because Dpreciation is calculated on pe annum basis for the company as a whole and it is apportioned between the departments on the basis of Number of hours each department allocated o such asset/ machinery .

Provided if Value of Asset or life of asset can be ascertained department wise then in that ratio otherwise in last can allocate on the basis of number of hours that department uses Machinery.

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