Company K has two operating departments, Fabrication and Finishing. In addition, the company has two supporting departments. The Power department provides electricity to all departments, whereas the maintenance department is responsible for the repairs and maintenance work of the entire company. The Power department costs are allocated based on kilowatt hours used. Maintenance department costs are allocated based on the number of internal work orders. The supporting departments' costs are allocated to the operating departments using a single rate.

The data below summarizes the support hours utilized by each department as well as their budgeted variable and fixed costs:

	Fabrication	Finishing	Power	Maintenance
Department variable costs	56,000	21,750	410,000	180,000
Department fixed costs	230,500	157,000	1,560,000	430,000
Kilowatt hours	44,500	27,500	-	12,000
Internal work orders	250	360	110	-

Required:

1. Based on the data provided, calculate the total costs of the operating departments, after the allocated supporting departments’ costs, using:

a. Direct method

b. Step down method with Maintenance department first

2. Provide one strategy for deciding which supporting department to be allocated first.