Use the following information for the next 6 questions.
The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected:
-If the step-down method is used and maintenance is allocated first, cafeteria costs allocated to packaging will be
A) $34,704
B) $55,757
C) $28,125
D) $54,792

Question

Use the following information for the next 6 questions.
The accountant for Milton, Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: 
-If the step-down method is used and maintenance is allocated first, cafeteria costs allocated to packaging will be
A) $34,704 
B) $55,757 
C) $28,125 
D) $54,792

Quizplus · Accepted Answer

Maintenance is allocated first, so the $28,125 of maintenance costs is allocated to packaging. The remaining $55,757 of cafeteria costs is then allocated to the other departments.

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