A. This answer is incorrect. Please see correct answer for an explanation.

B. This is the amount of maintenance costs allocated to the assembly department, not the total service costs allocated to the assembly department.

C. Under the direct method the service department costs are not allocated to other service departments. As such, we need to make certain that when we determine the ratio to allocate the costs to the production departments, we do not include the usage by the other service departments. In order to allocate the costs of the quality control department to assembly, we need to determine what percentage of the quality control time that was used by the production departments was used by assembly. Assembly used QC 7,000 hours and machining used QC 21,000. Thus, assembly will get 25% (7,000 ÷ 28,000), or $87,500 of the QC costs. Assembly used the maintenance department a total of 12,000 hours and machining used maintenance for 18,000 hours. Thus, assembly will get 40% (12,000 ÷ 30,000) of the maintenance costs, or $80,000. In total, therefore, the assembly department received $167,500 in costs allocated from the service departments.

D. This is the amount of quality control costs allocated to the assembly department, not the total service costs allocated to the assembly department.