A firm has two production departments: Department X and Department Y.

Both production departments are supported by two service departments: Department A (i.e. the power department) and Department B (i.e. the maintenance department). Departments A and B also consume service from one another.

The work done by Departments A and B is summarized in the table below (work by Department A is in kilowatt-hours; work by Department B is in labor hours).

	A	B	X	Y
Department A (Power)	0	100	150	50
Department B (Maintenance)	75	0	125	100

Costs of Department A are $100,000, and costs for Department B are $120,000.

Using the step-down method, what is Department As allocation to Department X (round to nearest dollar if necessary)?

(Assume Department Bs costs are allocated to production departments and stepped down to Department A first, before Department As costs are allocated.)

	a.	$65,000
	b.	$97,500
	c.	$75,000
	d.	$50,000