9:42 AM Tue 12 Jan web.whatsapp.com QUESTION 2 Lovely Lace Company (LLC) is developing departmental overhead rates based on direct-labour hours for its two production departments, Sewing and Finishing. The Sewing department employs 20 people and finishing department employs 80 people. Each person in these two departments works 2,000 hours per year. The production-related overhead costs for the Sewing department are budgeted at RM200,000, and the finishing department costs are budgeted at RM320,000. Two services department have budgeted costs of RM48,000 and RM250,000, respectively. The production department overhead rates cannot be determined until the service department's costs are allocated. The following schedule reflects the use of maintenance departments and computing departments output by various departments. Service Department Maintenance (Maintenance hours) Computing (minutes) 0 Using Department Maintenance Computing Sewing 1,000 1,000 Finishing 8,000 240,000 0 840,000 120,000 Required: 1. Use the direct method to allocate services department costs. Calculate the overhead rates per direct-labour hour for the Sewing department and the Finishing department. (5 marks) 2. Use the step-down method to allocate service department costs. Allocate the computing departments costs first. Calculate the overhead rates per direct-labour hour for the Sewing department and the Finishing department. (6 marks) 3. Use the reciprocal-services method to allocate service department costs. Calculate the overhead rates per direct-labour hour for the Sewing department and finishing department. (6 marks) 4. Which of the three methods of services department cost allocation results in the most accurate overhead rates? Why? (3 marks) (Total 20 Marks) 100%