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

Christina Company has two service departments,Maintenance and Human Resources.Christina 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:
$\begin{array}{llll}&&\text { Human }\\&\text { Maintenlance }&\text { Resources } & \text { Mixing } & \text { Finishing } \\\text { Direct costs }& \$ 50,400 & \$ 33,600 & \$ 42,000 & \$ 70,000 \\\text { Square footage }&1,600 & 800 & 3,200 & 2,400 \\\text { Number of employees }&16 & 24 & 48 & 64\end{array}$
Assume the step-down method is used to allocate service department costs and the Human Resources Department is allocated first.Then the cost allocated from the Human Resources Department to the Maintenance Department is ________.

A) $0
B) $3,539
C) $4,200
D) $13,440

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free