Oaks Company Has Two Support Departments, Maintenance Department (MD) and Personnel

Multiple Choice

Oaks Company has two support departments, Maintenance Department (MD) and Personnel Department (PD) , and two producing departments, P1 and P2. The Maintenance Department costs of £30,000 are allocated on the basis of standard service used. The Personnel Department costs of £4,500 are allocated on the basis of number of employees. The direct costs of Departments P1 and P2 are £9,000 and £15,000, respectively. Data on standard service hours and number of employees are as follows: $\begin{array}{lrrrr}&\text { MD } & \text { PD } & \text { P1 } & \text { P2 }\\\text { Standard service hours used } & 100 & 50 & 300 & 150 \\\text { Number of employees } & 10 & 20 & 90 & 90 \\\\\text { Direct labour hours } & 50 & 50 & 250 & 250\end{array}$ Using the sequential method, if the support department with the highest percentage of interdepartmental service is allocated first, the cost of the support departments allocated to Department P1 is

A) £12,750.
B) £24,000.
C) £20,295.
D) £21,750.