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PLEASE HELP!!!!!! Question 1 (15 marks) ITExtra develops digital security solutions for organisations. ITExtra has two main operating departments, Robotics and Virtual, and two support
PLEASE HELP!!!!!!
Question 1 (15 marks) ITExtra develops digital security solutions for organisations. ITExtra has two main operating departments, Robotics and Virtual, and two support departments, Facilities and Engineering. The basis used to allocate Facilities is budgeted facility hours. The basis used to allocate Engineering is budgeted engineering hours. The Facilities budget is $350,000, while the Engineering budget is $950,000. The following table summarises budgeted costs and usage by each department. Support Departments Operating Departments Facilities Engineering Robotics Virtual $350,000 $950,000 $3.5m $1.4m 1,000 2,000 5,000 Budgeted costs Facilities supplied support - budgeted facility hours Engineering supplied support budgeted engineering hours 2,000 24,000 36,000 Required: 1. Use the direct method to allocate support department costs to the operating departments. (3 marks) 2. Use the step-down method to allocate support department costs to operating departments. (5 marks) 3. Explain and justify the method ITExtra should use to allocate the cost of support departments to operating departments. (7 marks)Step by Step Solution
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