Problem - Hampton Corporation has two production departments, Machining and Assembly and three service plant departments, Supervision (Super), Maintenance (Maint) and Cafeteria (Cafe). Data relevant to Hampton are:
Direct % % % % %
Dept Cost $ Super Maint Café Machining Assembly
Super 120,000 0.10 0.10 0.60 0.20
Maint 360,000 0.15 0.10 0.60 0.15
Café 170,000 0.20 0.20 0.30 0.30
Machining280,000
Assembly380,000
Under the step-method, supervision costs (Super) are allocated first, maintenance costs (Maint) second, and cafeteria costs (Café) third. (Your answers may be just a little different due to rounding. Choose the answer closest to yours)
What is the amount of maintenance that would be allocated to the machining department, assuming Hampton uses the step-method to allocate the costs of service departments?
A) $216,000
B) $262,588
C) $315,200
D) None of the above (A, B, or C).