Smokey & the Bandit Corporation has three production departments Alpha, Beta, and Gamma. Smokey & the Bandit also has two service departments, Human Resources and Technology. Technology costs are allocated based on value of assets employed, and Human Resources costs are allocated based on number of employees. Assume that Technology provides more service to the other departments than does the Human Resources Department.

Dept.	Direct Costs	Employees	Asset Value
Technology	$750,000	15	-
Human Resources	200,000	-	$600,000
Alpha	700,000	10	300,000
Beta	200,000	5	150,000
Gamma	250,000	10	800,000

Using the step method, what amount of Technology costs is allocated to Gamma (round to the nearest dollar)?

1. $324,324

2. $187,500

3. $480,000

4. $389,189