Wenzel Company Has Two Service Departments,Maintenance and Human Resources Assume the Step-Down Method Is Used to Allocate Service Department

question 52

Multiple Choice

Wenzel Company has two service departments,Maintenance and Human Resources.Wenzel Company also has two production departments,Mixing and Finishing.Maintenance costs are allocated based on square footage while Human Resources costs are allocated based on number of employees.The following information has been gathered for the current year:
$\begin{array}{llll}&&\text { Human }\\&\text { Maintenlance }&\text { Resources } & \text { Mixing } & \text { Finishing } \\\text { Direct costs }& \$ 50,400 & \$ 33,600 & \$ 42,000 & \$ 70,000 \\\text { Square footage }&1,600 & 800 & 3,200 & 2,400 \\\text { Number of employees }&16 & 24 & 48 & 64\end{array}$
Assume the step-down method is used to allocate service department costs and the Maintenance Department is allocated first.What amount of costs would be allocated from the Maintenance Department to the Human Resources Department?

• A) $0
• B) $5,040
• C) $6,300
• D) $16,800

---

Definitions:

RNA Nucleotides

The basic building blocks of RNA, consisting of a nitrogen base, a sugar (ribose), and a phosphate group.

Amino Acids

Life's foundational components, organic molecules, which merge to constitute proteins.

Proteosomes

Complex protein structures within cells that breakdown and recycle proteins that are damaged or no longer needed.

Peroxisomes

Membrane-bound organelles within cells that contain enzymes for breaking down toxic substances and synthesizing certain lipids.