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Question - The Merchant Manufacturing Company has two service departments - purchasing and maintenance, and two production departments - fabrication and assembly. The distribution of each service department's efforts to the other departments is shown below:
From
To
Purchasing
Maintenance
Fabrication
Assembly
0%
60%
10%
30%
20%
50%
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
$96,000
18,000
72,000
48,000
The total cost accumulated in the assembly department using the step method is (calculate all ratios and percentages to 4 decimal places, for example 33.3333%, and round all dollar amounts to the nearest whole dollar):
A. $104,500.
B. $109,950.
C. $124,050.
D. $130,750.
E. $136,500.
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