8. Williams manufactures a variety of iron products, made to customer specifications, in small batches. Willie Williams, owner, is concerned that he does not have an accurate understanding of the costs of production. You, a newly-minted MBA, have researched his business and identified various costs and cost drivers. Data Janitorial Welding HR Own costs Svcs Assembly Total $12,000 $90,000 $37,200 $ 32,400 $ 54,000 $225,600 Square feet 500 3,000 1,500 2,000 4,500 # employees 11,500 7 25 8 10 75 125 # transactions 30 (thou) 100 180 600 140 1,050 Power usage 22 730 11 17 220 1,000 The service departments (Janitorial, HR, and Data Services) are allocated to the two production departments (Welding and Assembly). Janitorial costs are allocated using square feet, HR using number of employees, and Data Services using number of transactions. You recall that there are several approaches to the allocation of service department costs, direct, step-down and reciprocal methods. If the direct method is used, which of the following is true? A. The amount of Welding costs allocated to Assembly is $37,500 B. The amount of HR allocated to Janitorial is $2,604 C. The amount of Data Services costs allocated to Welding is $13,500 D. The amount of Janitorial costs allocated to Assembly is $4,909 E. None of the choices are correct 9. Refer to the information in Question 8 above. If the step-down method is used in this case, which sequence of allocations is the most valid? A. Data, Janitorial, HR B. HR, Data, Janitorial C. Data, HR, Janitorial D. Janitorial, Welding, HR, Data Sves, Assembly E. All sequences above are acceptable