Bettys Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $175,000 are allocated on the basis of budgeted warehouse-hours. Data Center department costs of $75,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $125,000 and $150,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

	Support Departments		Production Departments
	Warehouse Department	Data Center Department	Music	Books
Budgeted Costs	$175,000	$75,000	$125,000	$150,000
Budgeted warehouse-hours	NA	250	500	750
Number of computer hours	100	NA	400	500

1. Using the direct method, what amount of Warehouse Department costs will be allocated to the Department Books?

a) $70,000

b) $105,000

c) $75,000

d) $87,500