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Salinas Company Has Two Service Departments,Maintenance and Human Resources Assume the Step-Down Method Is Used to Allocate Service Department

Question 73

Multiple Choice

Salinas Company has two service departments,Maintenance and Human Resources.Salinas Company also has two production departments,Mixing and Finishing.Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees.The following information has been gathered for the current year:
 Human  Maintenance  Resources  Mixing  Finishing  Direct costs $126,000$84,000$105,000$175,000 Square footage 8001001,3001,100 Number of employees 20122832\begin{array}{lllll}&&\text { Human }\\\text { Maintenance } & \text { Resources }& \text { Mixing } & \text { Finishing }\\\text { Direct costs } & \$ 126,000 & \$ 84,000 & \$ 105,000 & \$ 175,000 \\\text { Square footage } & 800 & 100 & 1,300 & 1,100 \\\text { Number of employees } & 20 & 12 & 28 & 32\end{array}
Assume the step-down method is used to allocate service department costs.Which department should be allocated first?


A) Maintenance
B) Human Resources
C) Mixing
D) Finishing

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