XYZs Book and Music Store has two service departments, Warehouse and Data Center. Warehouse Department costs of $300,000 are allocated on the basis of budgeted warehouse-hours. Data Center Department costs of $100,000 are allocated based on the number of computer log-on hours. The costs of operating departments Music and Books are $160,000 and $240,000, respectively. Data on budgeted warehouse-hours and number of computer log-on hours are as follows:

	Support Departments		Production Departments
	Warehouse Department	Data Center Department	Music	Books
Budgeted costs	$300,000	$100,000	$160,000	$240,000
Budgeted warehouse-hours	NA	800	1,200	600
Number of computer hours	50	NA	200	600

1. Using the direct method, what amount of Data Center department costs will be allocated to the Books Department?

A. $70,588

B. $180,000

C. $75,000

D. $33,333

E. $60,000

2. Using the step-down method, what total amount of support department cost will be allocated to Books Department? Allocate the Data Center Department first.

A. $175,000

B. $172,549

C. $170,588

D. $139,820

E. $186,538