The Bingleton Company has four departments in its factory with two service departments, S1 and S2, and two production departments Assembly and Finishing. The current costs of each department are:

Service Departments

Production Departments

S1

$47,000

Assembly

$50,000

S2

$30,000

Finishing

$49,000

The distribution and consumption of services is given in the following table:

Services provided to:

S1

S2

Assembly

Finishing

Services provided by:

S1

-

35%

45%

20%

S2

15%

-

60%

25%

Using step-down method how much overhead costs will be allocated from S2 to Assembly:

Select one:

a.

$32,788

b.

$18,000

c.

$27,870

d.

$7,500