Licorice, Inc

Multiple Choice

Licorice, Inc., has two producing departments, P1 and P2, and two support departments, A and B. Department A serves Departments P1 and P2 in the percentages 45 percent and 55 percent. Department B serves Departments A, P1, and P2 in the percentages 15 percent, 55 percent, and 30 percent. Direct department costs for P1, P2, A, and B are $90,000, $84,000, $15,000, and $10,000, respectively. Compute the total costs to be allocated from Department A.

A) $15,000
B) $16,500
C) $18,000
D) $17,250