Westminster Manufacturing Company Has Two Support Activities and Two Line

Multiple Choice

Westminster Manufacturing Company has two support activities and two line activities. The following data pertain to usage patterns for the support and line activities: The costs of Maintenance are allocated based on square footage used. Human Resources costs are allocated based on number of employees. Activity A and B costs are overhead costs with predetermined overhead rates computed based on direct labor hours. If the company uses the step-down method of allocating support activities to line activities and allocates the cost of Maintenance first, what amount of total support activity costs will be allocated to Line Activities?

A) $60,000
B) $20,000
C) $40,000
D) $48,000
E) None of the above.