Question
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $350,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs
Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $350,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $110,000 are allocated based on the number of employees. The costs of operating departments A and B are $184,000 and $276,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: Production
Support Departments | Departments |
Maintenance Department | Personnel Department | A | B | |
Budgeted costs | $350,000 | $110,000 | $184,000 | $276,000 |
Budgeted maintenance-hours | NA | 840 | 1230 | 630 |
Number of employees | 55 | NA | 290 | 650 |
Using the step-down method, what amount of Maintenance Department cost will be allocated to Department A if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.)
$159,444 | ||
$50,111 | ||
$121,677 | ||
$231,452 |
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