Using the Direct Method, Pone Hill Company Allocates Janitorial Department

Multiple Choice

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly: If the Janitorial Department incurs costs of $200,000, how much of that cost is allocated to the Cutting Department?

A) $40,000
B) $160,000
C) $20,000
D) $19,800