Kevin Company Has Two Service Departments, Maintenance and Personnel, as Well

question 40

Multiple Choice

Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing.Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees.The following information has been gathered for the current year: $\begin{array}{lrrrr}&\text { Maintenance}&\text { Personnel}&\text { Mixing }&\text {Finishing }\\\hline\text { Direct dept. costs } & \$ 126,000 & \$ 84,000 & \$ 105,000 & \$ 175,000 \\\text { Square footage } & 800 & 400 & 1,600 & 1,200 \\\text { Number of employees } & 8 & 12 & 24 & 32\end{array}$ If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____.

• A)$42,000
• B)$72,000
• C)$31,500
• D)$105,000

---

Definitions:

Skin Turgor

A measure of skin elasticity, often used to assess hydration or dehydration.

Visual Acuity

The clarity or sharpness of vision, often measured by the ability to discern letters or numbers at a specified distance.

Middle-Age Patient

An individual in the middle stage of life, commonly categorized between the ages of 45 and 65, receiving medical treatment or care.

Polypharmacy

The simultaneous use of multiple medications by a patient, often associated with increased risks of adverse drug interactions and side effects.