The Lucas Manufacturing Company Has Two Production Departments (Fabrication and Assembly)

Multiple Choice

The Lucas Manufacturing Company has two production departments (fabrication and assembly) and three service departments (general factory administration, factory maintenance, and factory cafeteria) . A summary of costs and other data for each department, prior to allocation of service department costs for the year ended June 30, appears below: The costs of the general factory administration department, factory maintenance department, and factory cafeteria are allocated on the basis of direct labor hours, square footage occupied, and number of employees, respectively. Assuming that Lucas elects to distribute service department costs to production departments using the direct distribution method, the amount of general factory administration department costs that would be allocated to the assembly department would be (round all final calculations to the nearest dollar) :

A) $30,400.
B) $25,650.
C) $0.
D) $49,600.