Palace Company Has Two Service Departments and Two User Departments

Multiple Choice

Palace Company has two service departments and two user departments. The number of employees in each department is:
$$\begin{array} { l r } \text { Personnel } & 10 \\\text { Cafeteria } & 25 \\\text { Producing Department A } & 265 \\\text { Producing Department B } & 250 \\&550\end{array}$$
The fixed costs of the Personnel Department are allocated on a basis of the number of employees. If these costs are budgeted at $37,125 during a given period, the amount of cost allocated to the Cafeteria under the step method would be:

A) $0.
B) $1,718.75.
C) $1,687.50.
D) $1,802.18.