Use the Information Below to Answer the Following Question(s)

question 27

Multiple Choice

Use the information below to answer the following question(s) .
Joe's Tire Company has two support departments, Personnel and Maintenance. The Maintenance Department costs of $80,000 are allocated on the basis of standard service hours used. The Personnel Department costs of $20,000 are allocated based on the number of employees. Costs of Departments A and B are $40,000 and $60,000, respectively.
Data on standard service hours and number of employees are as follows:

-How much of the cost of the Personnel Department is allocated to Department A using the direct method?

• A) $5,000
• B) $15,000
• C) $13,333
• D) $12,632
• E) $48,000

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