Question

Martina, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining...

Martina, 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 allocates Building Maintenance first in step-down method. The square footage occupied by each department follows.

  Human Resources 16,000
  Building Maintenance 23,000
  Machining 28,000
  Assembly 36,000

Assuming use of the direct method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)?

64,000.

More information is needed to judge.

103,000.

39,000.

80,000.

Business   Accounting   
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Answer #1

The answer is - 64000

Machining                                  28,000
Assembly                                  36,000
Total Square Feet                                  64,000


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