Hanung Corp Has Two Service Departments, Maintenance and Personnel

question 40

Multiple Choice

Hanung Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $320,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $200,000 are allocated based on the number of employees. The costs of operating departments A and B are $208,000 and $312,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows:
Production
Support DepartmentsDepartments

Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if the service department with the highest percentage of interdepartmental support service is allocated first? (Do not round any intermediary calculations.)

• A) $31,079
• B) $79,424
• C) $49,640
• D) $88,489

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Definitions:

Memory Loss

The inability to remember information or experiences, which can be temporary or permanent.

Synapses

Tiny spaces between neurons; the gaps between neurons are referred to as synaptic gaps.

Neurons

Basic working units of the nervous system, cells specialized in carrying messages through an electrochemical process.

Endorphins

Natural, pain-relieving chemicals in the brain that are associated with feelings of euphoria and well-being.