Tennison Corporation Has Two Service Departments (Maintenance and Human Resources)

Multiple Choice

Tennison Corporation has two service departments (Maintenance and Human Resources) and three production departments (Machining, Assembly, and Finishing) . Maintenance is the larger service department and Assembly is the largest production department. The two service departments service each other as well as the three producing departments. On the basis of this information, which of the following cost allocations would not occur under the direct method?

A) Machining cost would be allocated to Assembly.
B) Maintenance cost would be allocated to Finishing.
C) Maintenance cost would be allocated to Human Resources.
D) Human Resources cost would be allocated to Finishing.
E) Both machining cost would be allocated to Assembly and maintenance cost would be allocated to Human Resources.