Use the Information Below to Answer the Following Question(s)

question 40

Multiple Choice

Use the information below to answer the following question(s) .Joe's Tire Company has two support departments, Personnel and Maintenance.The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used.The Personnel Department costs of $20,000 are allocated based on the number of employees.Costs of Departments A and B are $40,000 and $60,000, respectively.Data on standard service hours and number of employees are as follows:

-What is the cost allocated from the Maintenance Department to Department A using the step-down method if the Personnel Department is allocated first?

• A)$48,000
• B)$48,706
• C)$5,000
• D)$12,000
• E)$14,118

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