Pauline's Hospital has two service departments, Administration and Maintenance, and two operating departments, Nursing and Laboratory. Information on annual costs and allocation bases follows:

	Service Departments	Operating Departments
	Administration	Maintenance	Nursing	Laboratory
Direct costs	P1,200,000	P400,000	P8,000,000	P800,000
Number of square feet	5,000	-	60,000	15,000
Direct labor hours	-	10,000	40,000	10,000

1. Determine the service department costs allocated to the two operating departments using the direct method.
2. Determine the service department costs allocated to the two operating departments using the step-down method. Allocate the Maintenance department costs first.