The Maryville Construction Company occupies 85,000 square feet for construction of mobile homes. There are two manufacturing

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Question:

The Maryville Construction Company occupies 85,000 square feet for construction of mobile homes. There are two manufacturing departments, finishing and assembly, and four service departments labeled S1, S2, S3, and S4. Information relevant to Maryville is as follows:

		Allocation
Dept	Area used	S1	S2	S3	S4	Finishing	Assembly
S1	17,000	---	.10	.20	---	.20	.50
S2	4,250	---	---	.30	.30	---	.40
S3	8,500	.20	.20	---	.30	.20	.10
S4	4,250	.30	.10	.30	---	.20	.10
Fin.	21,250	---	---	---	---	---	---
Asm.	29,750	---	---	---	---	---	---

Rent paid for the area used is $720,000.

How much rent would be charged to S4 using the step method of allocation and a S3-S4-S1-S2 sequence for the allocations?

a. $90,000.

b. $40,000.

c. $54,000.

d. $36,000.