21.

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	$	66,000				0.70		0.10		0.20
S2	$	106,000		0.20				0.30		0.50
P1	$	175,000
P2	$	236,000

Under the step-method of cost allocation, the amount of costs allocated from S2 to P2 would be:

$95,125.

$53,000.

$65,500.

$56,250.