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	$	72,000				0.70		0.10		0.20
S2	$	157,000		0.20				0.30		0.50
P1	$	214,000
P2	$	179,000

Under the step-method of cost allocation, the amount of S2 costs allocated to S1 would be:

$62,800.

$31,400.

$0.

$64,800.