Greene Corporation has two service departments Administration (Admin) and Information Technology (IT), and two production departments A and B.

Admin department costs are allocated on the basis of the number of employees and the IT department costs are allocated on the basis of computer hours. The direct costs for each department and the proportion of service costs used by the various departments for May are as follows:

	Admin	IT	A	B
Direct costs	$60,000	$100,000	$175,000	$210,000
Admin (employees)		210	30	60
IT (computer hours)	416		624	1040

Under the step method of cost allocation, the amount of IT costs allocated to Admin, assuming Admin costs are allocated first, would be:

	a.	$0
	b.	$42,000
	c.	$40,000
	d.	$20,000