Question 24

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:

	Maintanace department	Personnel Department	A	B
Budgeted costs	$350,000	$110,000	$184,000	$276,000
Budgeted maintanace 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 interdepartmental support service is allocated first?

a) $231,452

b) $121,677

c) $50,111

d) $159,444