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National company has two support departments A&B and two operating departments X&Y. for the first quarter 2021, Budgeted overhead costs before any interdepartmental costs allocations
National company has two support departments A&B and two operating departments X&Y. for the first quarter 2021, Budgeted overhead costs before any interdepartmental costs allocations were: A $800,000, B $1,500,000, X $5,000,000 and Y $11,000,000. Support work supplied by A to B 20%, to X 50% and to Y 30%. Support work supplied by B to A 25%, to X 35% and to Y 40%. Using direct method, out of support departments costs, amount allocated to operating departments is:
a.
$700,000.
b.
$0.
c.
$1,500,000.
d.
$2,300,000.
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