The Company produces their product line in two production departments (P1 and P2) using 2 support departments (S1 and S2). The costs incurred in S1 and S2 are allocated to departments P1 and P2. S1 costs are allocated based on number of employees and S2 costs are allocated based on direct labor hours. The following data are available for a recent period:

	S1		S2		P1		P2
Number of employees	8		12		48		72
Direct labor hours	450		325		2,250		1,800
Cost incurred	$12,000		$18,000		$700,000		$117,500

Required Using the step method, allocate the service departments costs to the production departments. The first step will be to allocate costs from department S2. Show all work!