Calculate the total number of overhead

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Question - City 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

$18,000

$12,000

$15,000

$25,000

Sq. footage

800

400

1,600

1,200

No. of employees

8

12

24

32

If the step - down method is used to allocate costs, and the Maintenance Department renders the greatest service, the total number of overhead that would be allocated from Personnel to Mixing is:

A. $5,143

B. $6,107

C. $9,000

D. $6,000

Reference no: EM131714745

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