Earnest Corp has two service departments, Maintenance and Personnel. Maintenance Department costs of $300,000 are allocated on the basis of budgeted maintenance-hours. Personnel Department costs of $170,000 are allocated based on the number of employees. The costs of operating departments A and B are $188,000 and $282,000, respectively. Data on budgeted maintenance-hours and number of employees are as follows: A B Maintenance Personnel Department Department $300,000 $170,000 400 860 $188,000 1280 $282,000 600 Budgeted costs Budgeted maintenance- hours Number of employees 100 50 250 600 Calculate the total cost of operating departments A and B after the allocation of service department costs using the following methods: 1. Direct method 2. Step-down method (allocate the cost from the maintenance department first)