P & M Corporation Manufactures Products Exclusively for Military Clients

P & M Corporation manufactures products exclusively for military clients. Due to security concerns, each product is manufactured entirely within its own department. Department X specializes in communications equipment and Department Y in armor plating. Both production departments are supported by the corporation's power-generating department (Department A) and its equipment maintenance department (Department B) . The work supplied by support Department A is measured in kilowatt-hours of electricity, and that in Department B is measured in labor hours. Departments A and B also consume service from one another. The work done by Departments A and B is summarized in the table below.

-The costs of power and maintenance for the coming year are budgeted to be $200,000 and $80,000, respectively. Of the $80,000 of maintenance cost, what amount would be assigned to Department Y under the direct method?

A) $64,000
B) $40,000
C) $58,182
D) $30,000

Correct Answer:

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