FunnyPharm Inc., has four departments. Administration, Custodial, Production, and Bottling. Administration and Custodial are service departments. Production and Bottling are the Operations Departments. Information for the departments overhead is as follows:

Service DepartmentOperating Department AdministrationCustodialProductionBottlingCost Before Allocation$150 000$50 000$75 000$225 000Employee Hours10 0005 00020 00030 000Space Occupied (square metres)1 50050012 0008 000

The costs of the Administration department are allocated based on Employee Hours, while the costs of the Custodial Department is allocated based on space occupied.

Using the Direct Method, what is the total overhead cost after allocation for the Production department?

1. 315,000
2. 195,000
3. 155,000
4. 165,000