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Pop Tent has two service departments, HR and Maintenance. HR costs of $350,000 are allocated on the basis of budgeted service hours. Maintenance costs of
Pop Tent has two service departments, HR and Maintenance. HR costs of $350,000 are allocated on the basis of budgeted service hours. Maintenance costs of $160,000 are allocated based on the number of maintenance hours. The costs of operating departments Sealing and Sewing are $127,500 and $153,000, respectively. Data on budgeted service hours and number of maintenance hours is as follows: Support Departments Production Departments HR Maintenance Sealing Sewing Budgeted costs $350,000 $160,000 $127,500 $153,000 Budgeted service hours NA 600 1,100 1,550 Number of maintenance hours 270 NA 900 1,070 Using the step - down method, what amount of Maintenance costs will be allocated to Sealing if the service department with the highest percentage of interdepartmental support service is allocated first? (Round intermediary calculations to three decimal places.) O A. $102,711 O B. $86,904 O C. $122,072 O D. $73,096
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