BUSH Co. is developing departmental overhead rates based on direct labor hours for its two production departments-molding and assembly. The molding department employs 20 people, and the assembly department employs 80 people. Each person in these two departments works 2,500 hours per year. The production-related overhead costs for the molding department are budgeted at $200,000, and the assembly department costs are budgeted at $320,000. Two support departmentsrepair and power- directly support the two production Departments and have budgeted costs of $48,000 and $250,000, respectively. The production departments' overhead rates cannot be determined until the support departments' costs are properly allocated. The following schedule reflects the use of the repair department's and power department's output by the various departments. Repair Power 1,750 Repair hours Kilowatt-hours Molding 1,000 840,000 Assembly 8,000 120,000 260,000 Required: 1. Calculate the overhead rates per direct labor hour for the molding department and the assembly department. The company implements the step-down allocation method to charge the production departments for support department costs. It is assumed that the priority for allocation will be based on the highest percentage of the supporting department total service to other support departments. (7%) 2. Calculate the overhead rates per direct labor hour for the molding department and the assembly department using the reciprocal method to charge support department costs to each other and to the production departments. (10%) 3. Explain the difference between the methods, and which method do you think should be used by BUSH Co.?(3%)