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Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department

Jake's Battery Company has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $80,000 are allocated based on the number of employees. The costs of operating departments A and B are $160,000 and $240,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:

Support Departments Production Departments
Maintenance Department Personnel Department A B
Budgeted costs $320,000 $80,000 $160,000 $240,000
Budgeted maintenance-hours NA 800 960 640
Number of employees 40 NA 160 480

Using the direct method, what amount of Maintenance Department costs will be allocated to Department B?

A) $96,000

B) $128,000

C) $156,000

D) $192,000

Using the direct method, what amount of Personnel Department costs will be allocated to Department B?

A) $20,000

B) $32,000

C) $48,000

D) $60,000

Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if the service department with the highest percentage of interdepartmental support service is allocated first? (Round up)

A) $64,000

B) $85,333

C) $114,667

D) $128,000

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