Sigma, Inc Using the Direct Method, Allocate the Costs of the Administrative

Multiple Choice

Sigma, Inc., has two support departments, the Administrative Department and the Personnel Department, and two producing departments, the Machining Department and the Blending Department. The Administrative Department costs of $50,000 are allocated on the basis of standard service used. The Personnel Department costs of $10,000 are allocated on the basis of number of employees. The direct costs of Machining Department and Blending Department are $30,000 and $60,000, respectively. Data on standard service hours and number of employees are as follows: $\begin{array}{lrrrr}&\text { Administrative } & \text { Personnel } & \text { Machining } & \text { Blending } \\&\text { Department } & \text { Department } & \text { Department } & \text { Department }\\\text { Standard service hours used } & 200 & 100 & 150 & 250 \\\text { Number of employees } & 10 & 20 & 15 & 10 \\\text { Directlabor hours } & 100 & 80 & 150 & 200\end{array}$
Using the direct method, allocate the costs of the Administrative and Personnel departments to the Machining departments.

A) $30,450
B) $27,250
C) $41,500
D) $54,750