uestion $38$ and $39$ are based on the following:

ool Inc., has three service departments that support the producti utlined below is the estimated overhead by department for ng year.

$\backslash$table$[[,$Estimated,Number of$],[$ruice Department,Overhead,Employees$],[$ceiving$,$P$25,000,],[$pair$,35,000,2],[$l$,10,000,1]]$

duction Departments

sembly

ling

air Department supports the greatest of departments, foll ool Department. Overhead cost is allocated to departments e number of employees.

ng the direct method of allocation, how much of the R artment's overhead will be alloctaed to the Tool Departm

Zero

P$875$

$P7,000$

P$11,667$

ig the step$-$down method of allocation, the allocation fr air Department to the Tool Department would be:

Zero

$875$

$7,000$

$11,667$

$J$ & P tool Inc., has three service departments that support the production area. Outlined below is the estimated overhead by department for the upcoming year.

$\backslash$table$[[$Service Department,$\backslash$table$[[$Estimated$],[$Overhead$]],\backslash$table$[[$Number of$],[$Employees$]]],[$Receiving$,P25,000,2],[$Repair$,35,000,2],[$Tool$,10,000,1],[,,],[$Production Departments,,$25],[$Assembly$,,12],[$Boiling$,,]]$

The Repair Department supports the greatest of departments, followed by the Tool Department. Overhead cost is allocated to departments based upon the number of employees.

$38.$ Using the direct method of allocation, how much of the Repair Department's overhead will be alloctaed to the Tool Department?

a$.$ Zero

b$.P875$

c$.P7,000$

d$.P11,667$

$39.$ Using the step$-$down method of allocation, the allocation from the Repair Department to the Tool Department would be:

a$.$ Zero

b$.P875$

c$.P7,000$

d$.P11,667$