Fabricating and Finishing are the two production departments of a manufacturing company. Building Operations and Information Services are service departments that provide support to the two production departments as well as to each other. The company employs departmental overhead rates in the two production departments to allocate the service department costs to the production departments. Square footage is used to allocate building operations, and computer time is used to allocate information services.

The costs of the service departments and relevant operating data for the departments are as follows:

Building      Information

                                    Operations     Services    Fabricating     Finishing

Costs:            

Labor and benefit costs            $200,000      $300,000     

Other traceable costs               350,000        900,000     

Total                               $550,000    $1,200,000     

Operating Data:            

Square feet occupied                  5,000         10,000      16,000       24,000

Computer time (in hours)                200                       1,200          600

If the company employs the direct method to allocate the costs of the service departments, then the amount of building operations costs allocated to Fabricating would be

A. $220,000

B. $160,000

C. $140,000

D. $176,000