Question: 12. Without prejudice to your answer in 11, assume that the manufacturing company employs the step-down allocation method to allocate service department costs. If it

12. Without prejudice to your answer in 11, assume that the manufacturing company employs the step-down allocation method to allocate service department costs. If it allocates the cost of the maintenance department first, then the amount of the maintenance department’s costs that are directly allocated to the plating department would be

a. $144,000

b. $120,000

c. $115,200

d. $ 90,000 APPENDIX A: BUSINESS ENVIRONMENT AND CONCEPTS SAMPLE EXAMINATION 1289

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