The Hsu Manufacturing Company Has Two Service Departments: Maintenance and Accounting

Multiple Choice

The Hsu Manufacturing Company has two service departments: Maintenance and Accounting. The Maintenance Department's costs of $300,000 are allocated on the basis of machine hours. The Accounting Department's costs of $120,000 are allocated on the basis of the number of employees within a specific department. The direct departmental costs for A and B are $300,000 and $500,000, respectively.
$$\begin{array} { | l | r | r | r | r | } \hline & \text { Maintenmes } & \text { Accounting } & \text { A } & \text { B } \\\hline \text { Machine hours } & 480 & 20 & 2,300 & 200 \\\hline \text { Number of employees } & 2 & 2 & 8 & 4 \\\hline\end{array}$$

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What is the Accounting Department's cost allocated to Department B using the direct method?

A) $40,000.
B) $80,000.
C) $20,000.
D) $10,000.