Reference no: EM132484457

Point 1: Galaxy Industries Ltd has two service departments, Maintenance and Personnel. Maintenance Department costs of $160,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $40,000 are allocated based on the number of employees. The costs of operating departments A and B are $80,000 and $120,000 respectively.

1. Maintenance Department budgeted 200 maintenance-hours to Personnel Department, 480 maintenance-hours to Department A, and 320 maintenance-hours to Department B.
2. The Maintenance Department has 10 employees, Department A has 66 employees, and Department B has 24 employees.

Question 1: Using the step-down method, what amount of Maintenance Department cost will be allocated to Department B if Personnel department is allocated first? (Rounded)

a. $52,480

b. $51,200

c. $65,600

d. $76,800

e. $98,400