'Mammoth Carpeting' is a medium-sized firm, providing carpeting solutions to the expanding number of agricultural, horticultural and viticulture businesses in the surrounding provinces. Mary, the Accounting Manager of Mammoth Carpeting has enjoyed the daily challenges of containing costs but ensuring the firm made a profit. She was always looking at ways to increase the accuracy of her data to improve efficiency and provide information that was useful for decision- making. For this reason, she had a new idea that she was thinking of implementing, that is the reciprocal services method of allocating multiple service (support) department costs to production departments, instead of the currently used direct method. In 2021, Mary decided to investigate the effect of using the reciprocal services method when preparing the production overhead cost budget for 2022. Budgeted costs for each department are shown in Exhibit 1. The stores and maintenance departments are production service {support} departments. An analysis of the services they provide indicates that their costs should be apportioned as shown in Exhibit 2. The number of machine and labour hours budgeted for 2022 are shown in Exhibit 3. Exhibit 1 Budgeted Overhead Costs of Departments for 2022 Budgeted overhead costs (5) 120,000 100,000 600,000 250,000 150,000 Exhibit 2 Proportion of Services Provided to Other Departments ervice Proportion of service department's work provided to otheLdepartment Department m_mm _ Exhibit 3 Budgeted Machine and Labour Hours for 2022 Production Department =M_w Mary was informed by 'Mammoth Carpeting' owner of a possible job for the Flavorful Harvest in early 2022. She was requested to calculate the job costs in preparation for bidding. Costs and resource use for the job are provided in Exhibit 4. Exhibit 4 Direct Costs and Resource Use for the Flavourful Harvest Job \"m w_ ___ m_ Allocate the budgeted costs of the service departments to the production departments for 2022 using the current method, and calculate overhead allocation rates for each production department. Use the most appropriate cost allocation base for each department, explaining the reason for its choice. Using information from (1) and Exhibit 4, calculate the cost for Flavourful Harvest job. Consider Mary's proposal, redo the allocation of the budgeted costs of the service departments to the production departments for 2022 using the reciprocal services method, and calculate overhead allocation rates for each production department. Use the most appropriate cost allocation base for each department, explaining the reason for its choice. Using information from (3) and Exhibit 4, calculate the cost for Flavourful Harvest job, if Marv used the proposed method of allocating service department costs. Which method of allocating service department costs, current method or proposed method, would you recommend Marv use at Mammoth? Why? Do you have any modifications on Mary's proposal that she can investigate to improve efficiency and provide better information for decision making at Mammoth