100 An outside supplier has offered to sell 15.000 units of part 5-6 cach year to Han Products for $30 per part. If Han Products accepts this offer, the facilities now being used to manufacture part 5-6 could be rented to another company at an annual rental of $50,000. However. Han Products has determined that two thirds of the fixed manufacturing overhead being applied to part S6 would continue even if part 5-6 were purchased from the outside supplier. Required: Prepare computations showing how much profits will increase or decrease if the outside suppliers offer is accepted III. Madison Park Co-op, a whole foods grocery and gift shop, has provided the following data to be used in its service department cost allocations: Service Departments Operating Departments Administration Janitorial Groceries Gifs Departmental cost $105,000 $48.000 $2,800,000 $700,000 before allocations Employee-hours 320 160 100 740 Space occupied-square feet 250 4,000 1.000 Required: Using the step method, allocate the costs of the service departments to the two operating departments Allocates administrative costs first on the basis of employee hours and then Janitorial costs on the basis of space occupied. IV. The Ferre Publishing Company has three service departments and two operating departmetats. Selected data from a recent period on the five departments follow Service Departments Operating Departments Administration Janitorial Maintenance Biding Printing Total Overhead costs $140,000 $705,000 $48.000 $275.000 $430,000 $998.000 Number of employees 60 35 140 315 210 760 Square feet of 15,000 10,000 20,000 40,000 100.000 185,000 Space occupied Hours of press time 30,000 60.000 90.000 The company allocates service department costs by the step method in the following order Administration (number of employees), Janitorial (space occupied), and Maintenance (hours of press time). The company makes no distinction between variable and fixed service departiment Recuired: Using the step method, allocate the service department costs to the operating departments costs