From the RRG.
10.8 Step 8—Spend Mortal Strikes: The attacker spends mortal strike (? icons to cause the defender to suffer one wound for each icon spent.10.9 Step 9—Spend Hits: The attacker spends hit (? icons to cause the defender to suffer an amount of damage equal to the number of hit icons spent multiplied by the attacker’s threat.
So in a situation where there were no accuracy and 8 normal hits, and a unit with a tray of 1/1 units on the second rank, figure upgrade in the first rank.
if followed by this order you would have to spend the mortal first on the second rank before applying the normal hits and getting down to the first rank.
I don't think I have ever played it this way or had others mention it. It would make keep your front line characters protected one more turn.