UESTION 26

1. A company has two service departments (S1 and S2) and two user departments (U1 and U2). The following information is available:

   Service Department	Cost	Cost Allocation Base	Amount of service used by
   			S1	S2	User Department, U1	User Department, U2
   S1	$160,000	Number of Service Calls (SC)		25 SC	60 SC	15 SC
   S2	$200,000	Computer hours (CH)	2,000 CH		3,000 CH	5,000 CH

   Based on the direct method, how much of the service department costs will be allocated to U1?

   	A.	$156,000
   	B.	$203,000
   	C.	$180,000
   	D.	$288,000