Apportioning staff cafeteria costs by employee usage

Steps:

• Identify the nature of the overhead: Staff cafeteria provides benefits to employees, not production processes.
• Determine fair allocation: Costs should reflect who benefits, which is the workforce.
• Evaluate bases: Match the basis to the service's purpose, focusing on employee access.
• Select best fit: Number of employees directly measures usage and equity.

Why D is correct:

• Per cost accounting principles, service department overheads like cafeterias are apportioned by number of employees, as it equitably distributes costs based on beneficiary count.

Why the others are wrong:

• A: Relates to asset valuation, irrelevant to employee benefit distribution.
• B: Measures production effort, not cafeteria usage.
• C: Applies to space-based costs like rent, not personnel services.

Final answer: D