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How much service department costs will be allocated

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Question - Elrod Electronics is a manufacturer of data storage devices. Elrod consists of two service departments, maintenance and computing, and two production departments, assembly and testing. Maintenance costs are allocated on the basis of square footage occupied, and computing costs are allocated on the basis of the number of computer terminals. The following data relate to allocations of service department costs:

Service department costs: Maintenance: $600,000, Computing: $900,000

Square footage: Maintenance: 20,000, Computing: 30,000 Assembly: 90,000 Testing: 60,000

Terminals: Maintenance: 10, Computing: 30, Assembly: 20, Testing: 60

How much service department costs will be allocated to the assembly department using the direct method?

A. $585,000

B. $360,000

C. $900,000

D. $690,000

Reference no: EM131945620

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