Cordner Corporation has two production Departments: P1 and P2 and two service departments: S1 and S2. Direct costs for each department and the proportion of service costs used by the various departments for the month of July are as follows: Proportion of Services Used by:
Department Direct costs S1 S2 P1 P2
S1 $ 60,000 0.70 0.10 0.20
S2 $ 100,000 0.20 0.30 0.50
P1 $ 160,000
P2 $ 140,000
Under the direct-method of cost allocation, the amount of S1 costs allocated to P1 would be:
A. $20,000.
B. $6,000.
C. $30,000.
D. $62,500.