Case #3 Automated Fabrication Ltd. has two service departments, Human Resources and Information Technology (IT). Human Resources costs of $437,500 are allocated based on budgeted labour- hours. IT costs of $187,500 are allocated based on the number of computer log-on hours. The costs of operating departments, Machining and Inspection are $312,500 and $375,000, respectively. Data on budgeted labour-hours and number of computer log-on hours are as follows: Support Departments Production Departments Human Resources Machining Inspection Information Technology $187,500 600.00 $437,500 NA Budgeted costs HR: Budgeted labour-hours IT: Number of computer log-on hours $312,500 1,275.00 $375,000 1,875.00 250.00 NA 1,000.00 1,250.00 Required A) Using the direct method, what amount of Human Resources costs will be allocated to the Machining Department? B) Using the direct method, what amount of Human Resources costs will be allocated to the Inspection Department? C) Using the step-down with the Human Resources department allocating first: (i) What amount of the Human Resources costs will be allocated to the Machining Department? (ii) What amount of the Human Resources costs will be allocated to the Inspection Department? D) Using the step-down with the Human Resources department allocating first: (i) What amount of the IT costs will be allocated to the Machining Department? (ii) What amount of the IT costs will be allocated to the Inspection Department? E) You have been told that the Human Resources department allocates first using the step- down method. When using this approach, what criteria could firms use to determine which department allocates first? For each criterion you mention, determine which department would allocate first. F) Using the reciprocal method (either linear equations or repeated iterations), allocate the costs from the support departments to the production departments. Case #3 Automated Fabrication Ltd. has two service departments, Human Resources and Information Technology (IT). Human Resources costs of $437,500 are allocated based on budgeted labour- hours. IT costs of $187,500 are allocated based on the number of computer log-on hours. The costs of operating departments, Machining and Inspection are $312,500 and $375,000, respectively. Data on budgeted labour-hours and number of computer log-on hours are as follows: Support Departments Production Departments Human Resources Machining Inspection Information Technology $187,500 600.00 $437,500 NA Budgeted costs HR: Budgeted labour-hours IT: Number of computer log-on hours $312,500 1,275.00 $375,000 1,875.00 250.00 NA 1,000.00 1,250.00 Required A) Using the direct method, what amount of Human Resources costs will be allocated to the Machining Department? B) Using the direct method, what amount of Human Resources costs will be allocated to the Inspection Department? C) Using the step-down with the Human Resources department allocating first: (i) What amount of the Human Resources costs will be allocated to the Machining Department? (ii) What amount of the Human Resources costs will be allocated to the Inspection Department? D) Using the step-down with the Human Resources department allocating first: (i) What amount of the IT costs will be allocated to the Machining Department? (ii) What amount of the IT costs will be allocated to the Inspection Department? E) You have been told that the Human Resources department allocates first using the step- down method. When using this approach, what criteria could firms use to determine which department allocates first? For each criterion you mention, determine which department would allocate first. F) Using the reciprocal method (either linear equations or repeated iterations), allocate the costs from the support departments to the production departments