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Pompeo Inc. has two support departments (IT and administration) and two operating departments (assembly and...

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Accounting

Pompeo Inc. has two support departments (IT and administration) and two operating departments (assembly and finishing). The following information has been provided:

Overhead costs - IT: $75,000

IT services provided to: Administration - 15%; Assembly - 55%; Finishing - 30%

Overhead costs - Administration: $55,000

Administration services provided to: IT - 25%; Assembly - 35%; Finishing - 40%

If the direct method is used, how much IT cost will be allocated to the administration department?

Question 7 options:

$18,750

$11,250

$ 0

$8,250

Answer & Explanation Solved by verified expert
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