2. The Galaxy Company has two service departments (Power and maintenance) and two production departments (Machinery and Assembly). Additional information is given below: Kilowatt Maintenance Cost Hours Hours Machinery 450,000 39,000 1,600 Assembly 210.000 15,000 2,400 Power 135,000 1,000 Maintenance 90,000 6,000 600 5,500 Costs of Power department are allocated on the basis of Kilowatt Hours. The Costs of Maintenance department are allocated on the basis of Maintenance Hours. Total machine hours worked in Machinery Department is 2,500 and total direct labor hours worked in Assembly department is 1,000. Direct costs of Job order 501 are given as: Direct Material Cost 400,000 Direct Labor Cost 300,000 Job order 501 is processed 500 machine hours in Machinery Department and 250 labor hours in Assembly department. Required: 20 POINTS a) Allocate the total costs of the service departments to the producing departments by using step allocation method. b) Calculate total cost of Job order 501. 3. Gulf Shores Electronics currently produces the shipping containers it uses in the delivery of the electronic products it sells. The monthly unit costs of producing 4,000 containers is given as follows: TOTAL UNIT Unit-level materials $ 16,000 4.00 Unit-level labor 12,000 3.00 Unit-level overhead 8,000 2.00 Product-level costs 10,000 2.50 Allocated facility-level costs 20,000 5.00 TOTAL COSTS 66,000 16.50 Eighty percent (80%) of Product-level costs can be avoided by purchasing the containers. Ten percent (10%) of Facility-level costs can be avoided by purchasing the containers. Pascal Container Company has offered to sell comparable containers to Gulf Shores for $ 12 each. Required: 20 POINTS a) Should Gulf Shores continue to make the containers? Support your answer with appropriate documentation. b) Gulf Shores has the opportunity to lease the space currently being used in the manufacturing process. If the lease would produce $2,000 per month, would this affect your answer to requirement a? Support your answer with appropriate commentary