VelCraft Allocates Costs from Its Payroll Department and the Maintenance

Multiple Choice

VelCraft allocates costs from its payroll department and the maintenance department to its production departments using the direct method of allocation.Payroll department costs are allocated based on the number of employees in the department and maintenance department costs are allocated based on the number of square feet that the production department occupies within the factory.Information about the departments is presented below: $\begin{array}{lrrr}&&\text { Number of } & \text { Number of Square } \\\text { Department } & \text { Costs } &\text { Emplovees }&\text { feet Occupied }\\\text { Payroll } & \$ 150,000 & 2 & 2,000 \\\text { Maintenance } & \$ 220,000 & 8 & 64,000 \\\text { Molding } & & 75 & 100,000 \\\text { Finishing } & & 50 & 60,000 \\\text { Packaging } & & 25 & 40,000\end{array}$ When the payroll department costs are allocated, what is the amount per employee that will be charged to each of the departments?

A) $937.50
B) $15,000
C) $6.67
D) $1,000