Diane's Pottery Manufacturing Company Has Two Support Departments, Maintenance Department

Essay

Diane's Pottery 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. $15,000
b. $27,250
c. $25,000
d. $17,250