Analysis of the work done by departments A and B The work done in department A is measured by the direct labour-hours of materials-handling time. The work done in department B is measured by the kilowatt-hours of power. Budgeted costs of support departments The budgeted costs of the operating departments for the coming year are $2,500,000 for department X and $2,000,000 for department Y. Supervision costs are salary costs. Depreciation in department B is the straight-line depreciation of power-generation equipment in its 19 th year of an estimated 25 -year useful life; it is old, but well maintained, equipment. materials-handling department) and B (a power-generating department). An analysis of the work done by departments A and B in a typical period follows. (Click the icon to view analysis of the work done by departments A and B.) The budgeted costs of the support departments for the coming year are as follows. (Click the icon to view the budgeted costs of the support departments.) Required department B first), and (d) the reciprocal method. (a) the direct method Required 1. What are the allocations of costs of support departments A and B to operating departments X and Y using (a) the direct method, (b) the step-down method (allocate department A first), (c) the step-down method (allocate department B first), and (d) the reciprocal method (use the linear equation method)? 2. An outside company has offered to supply all the power needed by the Mega Company and to provide all the services of the present power department. The cost of this service will be $85 per kilowatt-hour of power. Should Mega accept? Explain