Stevie Company Has Two Service Departments,Maintenance and Human Resources If the Direct Method Is Used to Allocate Service Department

question 59

Multiple Choice

Stevie Company has two service departments,Maintenance and Human Resources.Stevie 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:
$\begin{array}{llll}&&\text { Human }\\&\text { Maintenlance }&\text { Resources } & \text { Mixing } & \text { Finishing } \\\text { Direct costs } & \$ 50,400 & \$ 33,600 & \$ 42,000 & \$ 70,000 \\\text { Square footage } & 1,600 & 800 & 3,000 & 2,000 \\\text { Number of employees } & 16 & 24 & 40 & 60\end{array}$
If the direct method is used to allocate service department costs,then the cost allocated from the Maintenance Department to the Mixing Department is ________.

• A) $20,160
• B) $25,200
• C) $30,240
• D) $50,400

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