Use This Information to Answer the Following Questions

question 63

Multiple Choice

Use this information to answer the following Questions
Trek, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly) . The company allocates Building Maintenance cost on the basis of square footage and believes that Building Maintenance provides more service than Human Resources. The square footage occupied by each department follows.

-Assuming use of the step-down method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread) ?

• A) 18,000.
• B) 48,000.
• C) 55,000.
• D) 66,000.
• E) More information is needed to judge.

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Definitions:

Supply Decrease

A supply decrease refers to a situation where the quantity of a good or service that producers are willing and able to sell at a given price level falls, often due to factors like increased production costs or regulatory changes.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where market supply and demand balance each other.

Supply Decrease

A situation in economics where the amount of a certain good or service that producers are willing to provide at a specific price level reduces.

Demand Decrease

A reduction in the quantity of a good or service that consumers are willing and able to purchase at various prices.