Bazaria Manufacturing Sdn. Bhd. has two service departments, Service Department P and Service Department Q, and two operating departments, Operating Department R and Operating Department S.

		Service Department P	Service Department Q	Operating Department R	Operating Department S
	Departmental cost	RM31,280	RM55,640	RM161,490	RM399,350
	Allocation base P	4,000	1,000	26,000	19,000
	Allocation base Q	6,000	2,000	30,000	2,000

The company uses the step-down method to allocate service department costs to operating departments. Service Department P costs are allocated first based on allocation base P and Service Department Q costs are allocated second based on allocation base Q.

Required:

a) Allocate the service department costs to the operating departments using the step-down method.

b) Explain the criteria for selecting an allocation base.

(5 markah/marks)