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Aiman Bakery produces and sells a variety of cakes around Selangor. The bakery has two operating departments Mixing and Packaging - and two support departments

Aiman Bakery produces and sells a variety of cakes around Selangor. The bakery has two operating departments Mixing and Packaging - and two support departments - Machine Maintenance and Human Resources. Jati Wood Company uses machine-hours to allocate Machine Maintenance costs and number of employees to allocate Human Resources costs. The following data relate to the 2018 record: image text in transcribed
Required:
a. Allocate the two support departments cost to the two operating departments using the following methods:
i. Direct method (10 marks)
ii. Step-down method with the sequence of allocation based on the highest-percentage support concept.(11 marks)
b. Distinguish among the three methods of allocating the costs of support departments to operating departments. (3 marks)
Support Departments Operating Departments Human resources Mixing Machine maintenance Packaging RM396,000 RM493,500 RM340,500 Budgeted costs RM450,000 incurred before any interdepartmental cost allocations 30% 50% 20% Support work supplied by Human Resources 20% 30% 50% Support work supplied by Machine Maintenance Required

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