Husky industries has two support departments, Power and Maintenance, and two operating departments, Fabrication and Finishing. The cost of the Power department is allocated based on kilowatt hours used and the cost of Maintenance is allocated based on square metres of space. In formation on each department is as follows:

PowerMaintenanceFabricationFinishing

Cost$ 1,500,000$ 300,000$ 4,400,000$ 3,250,000

Kilowatt hours6001,2004,8002,900

Square metres1,7002001,6001,500

Required:

Using the information provided above, allocate the support department costs to the production departments and determine the total cost of each producing department based on each of the following assumptions:

1)The direct method

2)The step method with power first and then maintenance

3)The step method with maintenance first and then power

4)The reciprocal method