• 1 Marks

MI – Nov 2015 – L1 – SA – Q6 – Costing Techniques

Determines the appropriate basis for apportioning joint security costs among shop owners.

The Management of Tejuosho Shopping Mall incurred a certain amount of money as joint security cost for the month of October 2014. What will be the most appropriate basis of apportioning this cost amongst the individual shop owners in the mall?
A. Value of inventory held in each store/shop
B. Cost of equipment in each shop
C. Number of workers in each shop
D. Floor area occupied by each shop
E. Turnover recorded by each shop

D. Floor area occupied by each shop

Explanation:
The most appropriate basis for apportioning joint security costs in a shopping mall would be the floor area occupied by each shop. Since security services cover the entire mall, the cost is best allocated based on the space each shop occupies, which directly correlates to the level of security needed.

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