Martinez Company has two service departments, - 4638

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Request Description

Martinez Company has two service departments, Maintenance and Personnel, as well as 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: 

Maintenance 

Personnel 

Mixing 

Finishing 

Direct dept. costs $50,400 $33,600 $42,000 $5,600 

Square footage 1,600 800 3,200 2,400 

Number of employees 16 24 48 64 

 

If the step down method is used to allocate costs and the Maintenance Department is allocated first, then the amount of overhead that would be allocated from Personnel to Maintenance is _____. 

A. $0 

B. $3,539 

C. $4,998 

D. $4,200 

 
Solution Description

Martinez Company has two service departments, Maintenance and Personnel, as