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Difficulty: MediumAllocation and Apportionment of Expenses among Departments

Kemi & Sons Enterprises operates three departments: Department X, Department Y, and Department Z. For the year ended 31st December 2025, the business incurred a total electricity bill of ₦240,000₦240,000. The electricity expense is to be apportioned among the departments based on the number of light points installed in each department. Department X has 15 light points, Department Y has 25 light points, and Department Z has 20 light points. What is the amount of electricity expense to be apportioned to Department Y?

  1. A
    ₦60,000
  2. B
    ₦80,000
  3. ₦100,000Answer
  4. D
    ₦140,000

Answer

₦100,000
The correct answer is ₦100,000. Electricity expenses are apportioned based on the number of light points in each department. The total number of light points is 15 + 25 + 20 = 60. Department Y's share is (25 / 60) × ₦240,000 = ₦100,000.

Step-by-Step Solution

1
Calculate the total number of light points across all departments.
Total light points = 15 + 25 + 20 = 60 light points.
The total light points form the common denominator for the apportionment ratio.
2
Determine the proportion for Department Y.
Proportion for Department Y = 25 / 60.
Department Y has 25 light points out of the 60 total light points.
3
Calculate the apportioned electricity expense for Department Y.
Apportioned expense = (25 / 60) × ₦240,000 = ₦100,000.
Multiplying total expense by Department Y's fractional ratio yields its equitable share.

Key Concept

Apportionment of Indirect Expenses based on Light Points
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Topics

Allocation and Apportionment of Expenses among Departments

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