Goldfarb’s Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the…

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Goldfarb’s Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $370,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $180,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $137,500 and $165,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

Production

Support Departments                Departments


Warehouse Department


Data Center Department


Music


Books

Budgeted costs

$370,000

$180,000

$137,500

$165,000

Budgeted warehouse-hours

NA

500

1050

1520

Number of computer hours

210

NA

900

1040

Using the direct method, what amount of Data Center Department costs will be allocated to Department Music? (Do not round any intermediary calculations.)

A. $75,349

B. $96,495

C. $83,505

D. $180,000

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