Morris Manufacturing Company Has Two Support Departments, Maintenance Department and Personnel

Multiple Choice

Morris Manufacturing Company has two support departments, Maintenance Department and Personnel Department, and two producing departments, X and Y.The Maintenance Department costs of $30,000 are allocated on the basis of standard service hours used.The Personnel Department costs of $4,500 are allocated on the basis of number of employees.The direct costs of Departments X and Y are $9,000 and $15,000, respectively. Data on standard service hours and number of employees are as follows:

- What are the total overhead costs associated with Department Y after allocating the Maintenance and Personnel Departments using the direct method?

A) $27,250
B) $15,000
C) $25,000
D) $17,250