Lisa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: Maintenance Dept. Personnel Dept. Production Dept. A Production Dept. B Standard service hours used 200 200 240 160 Number of employees 10 20 40 120 What is the cost of the Maintenance Department allocated to Department B using the step-down method if the support department with the highest percentage of interdepartmental service to the other support department is allocated first? Select one: a. $21,333 b. $48,000 c. $12,800 d. $16,000
Lisa's Automotive Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.
Data on standard service hours and number of employees are as follows:
|
|
Maintenance Dept. |
Personnel Dept. |
Production Dept. A |
Production Dept. B |
|---|---|---|---|---|
|
Standard service hours used |
200 |
200 |
240 |
160 |
|
Number of employees |
10 |
20 |
40 |
120 |
What is the cost of the Maintenance Department allocated to Department B using the step-down method if the support department with the highest percentage of interdepartmental service to the other support department is allocated first?
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