Erling & Kevin Ltd, a manufacturer of soccer balls, makes both high-end balls for professional and semi-professional use and regular balls for the amateur and childrens markets. The firm is organised into two operating divisions one for each generic product type and two support departments (human resources and information systems). Balls made in the professional division are hand-stitched whereas this is done by machines in the regular division. Each operating division conducts merchandising and marketing operations independently and produces a variety of different types of soccer balls.

Erling & Kevin Ltd uses the number of employees to allocate human resources costs and IT depreciation expenses to allocate information systems costs to the operating divisions. In terms of allocation of overheads to products, the company does not use a full ABC system but does try to choose an allocation basis for each operating division that best reflects the nature of what causes overhead costs. However at present information is limited to labour hours and machine hours. The following data is available for April 2023:

	SUPPORT DIVISIONS				OPERATING DIVISIONS		Total
	Human Resources		Information Systems		Professional	Regular
Budgeted (overhead) costs incurred before any
inter-department cost allocations	$258,900		$449,600		$1,073,869	$2,395,710	$4,178,079
Support work supplied by human resources department
Budgeted number of employees		3	5		14	9	31
Support work supplied by information systems department
Budgeted IT depreciation expense (in $)		35,000	97,500		159,500	187,000
Budgeted Labour hours		480	800		3,080 1,440
Budgeted Machine hours		- - 2,500 7,200

Question 1:

Allocate the support departments costs (human resources and information systems) to the two operating departments using the reciprocal method.

Question 2:

Using the most appropriate basis for allocation calculate the overhead cost for the signature product of the professional division (Pro-Shot) and the regular division (Sure-Shot), given the following additional information: