Question

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs...

Goldfarb's Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $200,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $142,500 and $171,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

Production

Support Departments Departments
Warehouse Department Data Center Department Music Books
Budgeted costs $370,000 $200,000 $142,500 $171,000
Budgeted warehouse-hours NA 590 1000 1600
Number of computer hours 250 NA 860

1010

Using the step-down method, what amount of Data Center Department cost will be allocated to Department Music if the service department with the highest percentage of interdepartmental support service is allocated first? (Round intermediary calculations to three decimal places.)

Choices:

$123,487

$108,021

$91,979

$144,992

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