Hypes Clinic Uses the Direct Method to Allocate Service Department

Hypes Clinic uses the direct method to allocate service department costs to operating departments. The clinic has two service departments, Personnel and Support, and two operating departments, Prenatal and Pediatrics.
Personnel Department costs are allocated on the basis of employee hours and Support Department costs are allocated on the basis of space occupied in square feet. The total Pediatrics Department cost after the allocations of service department costs is closest to:

A) $1,036,914
B) $1,036,040
C) $1,024,310
D) $1,033,809

Correct Answer:

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