10) Landslide Company has two service departments, Maintenance and Human Resources. Landslide 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 800 400 1,600 1,200

Number of employees 8 12 24 32

If the step-down method is used to allocate service department costs, and the Maintenance Department is allocated first, the amount of costs allocated from the Maintenance Department to the Mixing Department is ________.

A) $36,000

B) $42,000

C) $42,750

D) $63,000 this is the answer. Please explain