Hreck, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly). The company allocates Building Maintenance cost on the basis of square footage and allocates Building Maintenance first in step-down method. The square footage occupied by each department follows.
| Human Resources |
18,000 |
| Building Maintenance |
22,000 |
| Machining |
31,000 |
| Assembly |
39,000 |
1.Assuming use of the step-down method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)?
|
More information is needed to judge. |
|
88,000. |
|
70,000. |
|
110,000. |
|
40,000. |
2.Assuming use of the direct method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)?
|
40,000. |
|
110,000. |
|
88,000. |
|
More information is needed to judge. |
|
70,000. |