Hreck, Inc Assuming Use of the Step-Down Method, Over How Many Square

question 55

Multiple Choice

Hreck, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly) . The company allocates Building Maintenance cost on the basis of square footage and believes that Building Maintenance provides more service than Human Resources. The square footage occupied by each department follows. $$\begin{array} { l r } \text { Human Resources } & 7,000 \\\text { Building Maintenance } & 11,000 \\\text { Machining } & 20,000 \\\text { Assembly } & 28,000\end{array}$$ Assuming use of the step-down method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread) ?

• A) 18,000.
• B) 48,000.
• C) 55,000.
• D) 66,000.
• E) More information is needed to judge.

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