The Building Maintenance Department for Advantage Toys Budgets Annual Costs

question 78

Multiple Choice

The building maintenance department for Advantage Toys budgets annual costs of $4,200,000 based on the expected operating level for the coming year. The costs are allocated to two production departments. The following data relate to the potential allocation bases: $\begin{array}{lll}&\text { Production Dept. A }&\text { Production Dept. B}\\\text { Square footage } & 15,000 & 45,000 \\\text { Direct labor hours } & 25,000 & 50,000\end{array}$ If Advantage assigns costs to departments based on square footage, how much maintenance cost will be allocated to Production Department A?

• A) $1,400,000
• B) $1,050,000
• C) $1,575,000
• D) $2,100,000

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