Thomas Company has two service departments,Maintenance and Personnel.Thomas Company also has 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: Assume the step-down method is used to allocate service department costs and the Maintenance Department is allocated first.What are the total costs of the Mixing Department after allocation of service department costs?
A)$210,750
B)$275,500
C)$277,000
D)$279,250

Question

Thomas Company has two service departments,Maintenance and Personnel.Thomas Company also has 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:  Assume the step-down method is used to allocate service department costs and the Maintenance Department is allocated first.What are the total costs of the Mixing Department after allocation of service department costs?
A)$210,750 
B)$275,500 
C)$277,000 
D)$279,250

Quizplus · Accepted Answer

The Answer of Thomas Company has two service departments,Maintenance and Personnel.Thomas Company also has 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:  Assume the step-down method is used to allocate service department costs and the Maintenance Department is allocated first.What are the total costs of the Mixing Department after allocation of service department costs?
A)$210,750 
B)$275,500 
C)$277,000 
D)$279,250

Thomas Company Has Two Service Departments,Maintenance and Personnel