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:

Cell Membrane

A biological membrane that separates the interior of all cells from the outside environment, controlling the movement of substances in and out of cells.

Nucleus

The central and most important part of an atom, containing protons and neutrons, or the control center of a cell containing the cell's DNA.

Nuclear Membrane

A double lipid bilayer that encloses the nucleus in eukaryotic cells, separating the contents of the nucleus from the cytoplasm.

Gene Therapy

A medical treatment that involves altering the genes inside a patient's cells to treat or prevent disease.