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

Multiple Choice

City 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:

-If the step-down method is used to allocate costs, and the Personnel Department renders the greatest service, then the total cost of the Finishing Department after allocation would be

A) $25,000.
B) $39,572.
C) $39,892.
D) $39,357.