Chambers, Inc

Multiple Choice

Chambers, Inc. has two support departments (utilities and computer) and two operating departments (A and B) . The following data are given: Services Provided By
Utilities Computer
Direct costs $55,000 $75,000
Services provided to:
Utilities ---- 15%
Computer 25% ----
Operating department A 35% 55%
Operating department B 40% 30%
If the step-down method is used and utilities allocated first, how much computer cost would be allocated to the utilities department?

A) $0
B) $18,200
C) $13,750
D) $8,250