Ricardo Corporation Has Two Service Departments (Maintenance and Human Resources)

Multiple Choice

Ricardo Corporation has two service departments (Maintenance and Human Resources) and three production departments (Machining, Assembly, and Finishing) . The two service departments service each other, and studies have shown that Maintenance provides the greater amount of service. Given the various cost allocation methods, which of the following choices correctly denotes whether Maintenance cost would be allocated to Human Resources? $\begin{array}{llll}&\text {direct}&\text {step-down}&\text {reciprocal}\\\text { A. } & \text { Yes } & \text { No } & \text { Yes } \\\text { B. } & \text { Yes } & \text { No } & \text { No } \\\text { C.}&\text { Yes } & \text { Yes } & \text { Yes } \\\text { D. } & \text { No } & \text { Yes } & \text { No } \\\text { E. } & \text { No } & \text { Yes } & \text { Yes }\end{array}$

A) Choice A
B) Choice B
C) Choice C
D) Choice D
E) Choice E