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:
MD
PD
P1
P2
Standard service hours used
100
50
300
150
Number of employees
10
20
90
90
Direct labour hours
50
50
250
250
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.