Question

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 12,000
Building Maintenance 19,000
Machining 24,000
Assembly 32,000
Assuming use of the step-down method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)?

Multiple Choice

87,000.

56,000.

31,000.

68,000.

More information is needed to judge.

Answer 1

56,000

Step-by-step explanation:

The calculation of square feet would the Building Maintenance cost be allocated is shown below:-

Square feet over which Building Maintenance cost would be allocated = Square Footage of Machining + Square Footage of Assembly

= 24,000 + 32,000

= 56,000

Therefore for computing the square feet would the Building Maintenance cost be allocated we simply applied the above formula.