Jones and Jones is a management consulting firm that provides services in Human Resources (HR) and Information Technology (IT) A controversy has developed between the partners of the two service areas regarding who contributes substantially to the bottom line, The contention is about the assignment of overhead The HR partners argue for assigning overhead based on direct labour dollars, while the IT partners argue for implementing Activity - Based - costing (ABC) The partners agree to use next year's budgeted data for analysis and comparison. The following overhead data are collected to develop the comparison: Activity Cost Pools Cost Drivers Estimated Expected use of cost Overheads ($) drivers Employee training Direct labour $259,200 $2,160,000 dollars Administration Number of forms $91 440 3,000 forms Computing Number of $241,800 72000 transactions transactions Facility rental Number of $171,800 48 omployoos employees Expected use of cost drivers by HR Expected use of cost drivers by IT $1,320 000 direct labour dollars $840,000 direct labour dollars 960 forms 2,040 minutes 32,400 transactions 39,600 transactions 26 employees 22 employees $67,200 for travel $30 360 for travel Required: A Using traditional product costing as proposed by the HR partners, calculate the total overhead cost assigned to each service area. (5 marks) B. Using activity-based costing as proposed by IT partners, prepare a schedule assigning each activity's overhead cost pool to each service area based on the use of the cost drivers. (8 marks) C. Which method would you recommend? Explain. (2 marks)