Crusoe Crates Company has two service departments (S1 and S2) and two production departments (P1 and P2). The distribution of each service departments efforts (in percentages) to the other departments is:

	To:
From:	S1	S2	P1	P2
S1	0%	10%	30%	60%
S2	25%	0%	35%	40%

The direct operating costs of the departments (including both variable and fixed costs) are:

S1	$150,000
S2	$85,000
P1	$320,000
P2	$400,000
Total	$955,000

Required

Determine the total cost of P1 and P2 using the direct method.

Determine the total cost of P1 and P2 using the step method and allocating S1 first.