Riverview Inc

Multiple Choice

Riverview Inc. has two service departments (Maintenance and Human Resources) and three production departments (Machining, Assembly, and Finishing) . Maintenance is the largest 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) Maintenance cost would be allocated to Assembly.
B) Maintenance cost would be allocated to Finishing.
C) Maintenance cost would be allocated to Machining.
D) Human Resources cost would be allocated to Finishing.
E) Maintenance cost would be allocated to Human Resources.