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Valdez Company Has Two Service Departments, Maintenance and Personnel, as Well

Question 34

Multiple Choice

Valdez Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing.Maintenance costs are allocated
Based on square footage while personnel costs are allocated based on number of
Employees.The following information has been gathered for the current year:  Maintenance Personnel Mixing Finishing  Direct dept. costs $50,400$33,600$42,000$5,600 Square footage 1,6008003,2002,400 Number of employees 16244864\begin{array}{lrrrr}&\text { Maintenance}&\text { Personnel}&\text { Mixing }&\text {Finishing }\\\hline\text { Direct dept. costs } & \$ 50,400 & \$ 33,600 & \$ 42,000 & \$ 5,600 \\\text { Square footage } & 1,600 & 800 & 3,200 & 2,400 \\\text { Number of employees } & 16 & 24 & 48 & 64\end{array} If the step?down method is used to allocate costs and the Maintenance Department is allocated first, the amount of overhead that would be allocated from Maintenance to Personnel is _____.


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

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