1. Schneider manufactures a variety of aluminum products, made to customer specifications, in small batches. Ted Schneider, owner, is concerned that he does not have an accurate understanding of the costs of production. You, a recently graduated MBA, have researched his business and identified various costs and cost drivers.

	Janitorial		Fabrication		HR		IT	Assembly		Total
Own costs	$	18,000			$	85,000		$	31,500		$	39,000		$	76,000		$	249,500
Square feet		500				4,000			1,500			2,000			4,390			12,890
# employees		7				70			5			10			25			117
# computers		1				20			8			10			10			49
Power usage		22				730			11			17			220			1,000

The service departments (Janitorial, HR, and Data Services) are allocated to the two production departments (Fabrication and Assembly). Janitorial costs are allocated using square feet, HR using number of employees, and Data Services using number of computers. You recall that there are several approaches to the allocation of service department costs, direct, step-down and reciprocal methods.

If the step-down method is applied, allocating the service departments in descending order of cost, how much service department costs are allocated to the fabrication department?