1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected: Support Departments Operating Departments Maintenance Cafeteria Cutting Packaging Direct costs SAR50,000 SAR45,000 SAR275,000 SAR300,000 Number of employees 15 10 150 250 Square feet 1,500 2,000 3,500 4,000

a- If the direct method is used, calculate maintenance costs allocated to the cutting department?

b- If the direct method is used, calculate the total cost (including allocations) for the packaging department?

c- Assume you are working for the organization and are requested to allocate support department costs. Describe how you would choose the best method?