Enforcement Officer / Accounts Officer (EO/AO) 2017 recruitment test. Transcribed from the Commission's own booklet (series A, GRS-A-TNS); answer as per the official UPSC final answer key. This question is in Part B. Answer last reviewed 24 August 2026.

The cost of electric power should be apportioned over different departments according to

(a)horsepower of motors
(b)number of light points
(c)horsepower multiplied by machine hours
(d)machine hours

Answer

Why

Correct — C, (c) horsepower multiplied by machine hours. Apportioning an overhead means splitting a cost that serves several departments between them on a basis that measures how much each department benefited. So the right basis for any overhead is the one that comes closest to the thing actually consumed. What a department consumes when it uses electric power is energy, and energy is rating multiplied by time. The rating of a motor is expressed in horsepower and the time it runs is measured in machine hours, so horsepower multiplied by machine hours is the closest proxy for consumption that ordinary cost records contain. The test is easily seen by pushing each of the simpler bases. Suppose department A runs a 20-horsepower machine for 100 hours in the month and department B runs a 5-horsepower machine for 400 hours. On horsepower alone the cost splits 20 to 5, or four to one in A's favour. On machine hours alone it splits 100 to 400, one to four the other way. On horsepower-hours it splits 2,000 to 2,000 — equally, which is the answer that reflects the electricity the two departments actually drew. Each of the single-factor bases is capable of being wrong by any amount, in either direction, because each ignores half of what determines consumption. The genuinely accurate method, where it is available, is not on the list and is worth knowing anyway: install sub-meters and charge each department with the kilowatt-hours it records. Apportionment on horsepower-hours is what a costing system does in the absence of separate metering, and it is the standard answer in the table of bases every cost accounting course teaches. The fourth option is doing different work from the other two. Number of light points is a real basis of apportionment, but for lighting, not for power. The distinction between lighting and power is one of the most reliably examined lines in that table, and it is the reason the option is here.

Why the others are wrong

(a)horsepower of motors — Horsepower of motors is itself a recognised basis, used as a rough measure where the machines in the different departments run for broadly similar hours or where running hours are not recorded at all, and a costing textbook will list it beside the horsepower-hours basis. But it measures installed capacity rather than consumption: a heavy motor that stands idle for most of the month is charged as though it had run continuously, and a small motor running double shifts is undercharged. Since the option list offers the combination that supplies the missing factor, the single-factor version is not the basis the item is looking for.
(b)number of light points — Number of light points is the basis for apportioning lighting expenses, along with floor area, and this option is here to test whether the candidate keeps lighting and power apart. They behave quite differently: a lighting bill follows the number of fittings and the area to be lit, while a power bill follows the size of the motors and how long they run. A department may occupy a large, brightly lit floor and use almost no motive power, or run a heavy machine shop in a small, dim space. Using light points to spread a power bill charges a department for its windows rather than for its machinery.
(d)machine hours — Machine hours measure how long machines ran but say nothing about what they drew while running. Apportioning power on machine hours alone charges an hour on a small drilling machine at the same rate as an hour on a heavy press, which will overstate the cost of a department full of light machinery and understate that of a department with a few large motors. Machine hours are the right basis for other purposes — they are one of the standard bases for absorbing factory overhead into jobs, and are used to apportion depreciation and maintenance of machinery where the machines are comparable — but as a basis for electric power they supply only half of the product that matters.

Concept

Overhead costing proceeds in three steps, and the vocabulary of each is examined separately. Allocation is the charging of a whole item of cost to a single cost centre that incurred it, where that is possible: the wages of a departmental supervisor, or the power bill of a department that has its own meter. Apportionment is the splitting of a cost that serves several cost centres between them on an equitable basis, because it cannot be traced to any one of them. Absorption is the recovery of a cost centre's total overhead into the jobs or units passing through it, using a rate such as machine hour rate, direct labour hour rate or a percentage of direct wages. There is also a secondary distribution stage, in which the overheads of service departments — stores, maintenance, canteen — are redistributed to production departments by the direct, step-ladder, repeated distribution or simultaneous equation method. The standard bases of apportionment are worth learning as a table: floor area for rent, rates, heating and building repairs; number of light points or floor area for lighting; capital value of the assets for depreciation and insurance of plant; number of employees for canteen, welfare, supervision and personnel costs; direct wages for workmen's compensation and holiday pay; horsepower multiplied by machine hours for power; value or weight of materials for stores and material handling; and number of requisitions for storekeeping.

Cost accounting reaches EPFO papers mainly through this table, because a single line of it makes a complete question and there is no way to reason to the answer from a blank page. What makes this item slightly better than a memory test is the way the options are built: three of the four are made out of the same two ideas — horsepower and machine hours — taken singly and together, so a candidate who understands why the product is used can derive the answer even if the table has gone. That derivation is the thing to take away, because it generalises: for any overhead, ask what physical quantity is being consumed and choose the basis that measures it.

Key facts

Electric power is apportioned on horsepower multiplied by machine hours, because energy consumed is rating times running time.
Where sub-meters exist, power is allocated on actual kilowatt-hours rather than apportioned at all.
Lighting is apportioned on the number of light points or on floor area — not on horsepower.
Rent, rates, heating and building repairs are apportioned on floor area or volume.
Depreciation and insurance of plant are apportioned on the capital value of the assets.
Canteen, welfare, supervision and personnel costs are apportioned on the number of employees.
Allocation charges a whole cost to one cost centre; apportionment splits a shared cost; absorption recovers a cost centre's overhead into units of output.
Service department overheads are redistributed to production departments by the direct, step-ladder, repeated distribution or simultaneous equation method.

Energy is rating times time, so the basis has to be the product

Department A: 20 hp × 100 hours = 2,000→A twenty-horsepower machine run for a hundred hours in the month.

Department B: 5 hp × 400 hours = 2,000→A five-horsepower machine run for four hundred hours. The two departments drew the same electricity, and horsepower multiplied by machine hours is the only basis on the list that says so.

(a) On horsepower alone→The cost splits 20 to 5, four to one in A's favour. It measures installed capacity rather than consumption, so a heavy motor standing idle for most of the month is charged as though it had run continuously, and a small motor on double shifts is undercharged.

(d) On machine hours alone→The cost splits 100 to 400, one to four the other way. An hour on a small drilling machine is charged at the same rate as an hour on a heavy press. Each single-factor basis can be wrong by any amount, in either direction, because each ignores half of what determines consumption.

(b) Number of light points→A real basis of apportionment, but for lighting rather than for power — which is the line the option exists to test. A lighting bill follows the number of fittings and the area to be lit; a power bill follows the size of the motors and how long they run. Using light points to spread a power bill charges a department for its windows rather than for its machinery.

The accurate method, not on the list→Install sub-meters and charge each department with the kilowatt-hours it records — which is allocation rather than apportionment. Horsepower-hours is what a costing system does in the absence of separate metering, and it is the standard entry in the table of bases.

Study next

Primary distribution of overheads and the full table of apportionment basesSecondary distribution — direct, step-ladder, repeated distribution and simultaneous equation methodsAbsorption rates: machine hour rate, direct labour hour rate, percentage of direct wages and percentage of prime costUnder-absorption and over-absorption of overhead and its treatment at the year endClassification of overhead by function, by element and by behaviour, and the segregation of semi-variable costs

Common traps

Using the lighting basis for power, or the power basis for lighting. The two bills follow different physical facts.
Choosing horsepower alone because it appears in the textbook table, without noticing that the list offers the more complete basis.
Choosing machine hours because they are familiar from absorption rates, where they are indeed a standard choice.
Confusing allocation with apportionment. A department with its own meter is allocated its power cost; only an unmetered shared bill is apportioned.
Assuming a single basis fits a whole overhead heading; power, lighting and heating are separated precisely because their bases differ.

The overhead table is asked in both directions in recruitment papers: name the basis for a given overhead, as here, or name the overhead that goes with a given basis. A second, slightly harder shape asks which stage of overhead costing a described operation belongs to — allocation, apportionment, re-apportionment or absorption — and a third asks which method of secondary distribution deals with reciprocal services between two service departments. All three are answered from a single sheet listing the stages and the bases, which is the most efficient piece of preparation available in this part of the syllabus.

Related PYQs

No directly related past PYQ was found.

Practice

practice — not a real PYQ
Lighting expenses of a factory are most appropriately apportioned among departments on the basis of
- (a)horsepower of motors
- (b)number of light points or floor area
- (c)machine hours worked
- (d)value of plant and machinery
Answer(b) number of light points or floor area
practice — not a real PYQ
Canteen and welfare expenses of a factory are apportioned among departments on the basis of
- (a)floor area occupied
- (b)capital value of assets
- (c)number of employees in each department
- (d)direct material consumed
Answer(c) number of employees in each department

Why