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Question 3 15 Marks Hudson Books, an online book retailer, has two operating departments - corporate sales and consumer sales - and two support departments - human resources and information systems. Each sales department conducts merchandising and marketing operations independently. Hudson Books uses number of employees to allocate human resources costs and processing time to allocate information systems costs. The following data are available for September 2019. Support Departments Operating Departments Human Information Corporate Consumer Resources Systems Sales Sales Budgeted costs incurred $72,700 $234,000 $998,270 $489,860 before any inter department cost allocations Support work supplied by human resources department Budgeted number of 21 42 28 employees Support work supplied by information systems department Budgeted processing time (in 320 1,920 1,600 minutes) Required: a) Allocate the support departments' costs to the operating departments using the direct method. (5 marks) Page 9 of 12 Term 2 STANDARD Take-home Examination 2020 Foundations of Management Accounting - ACCT20076 b) Rank the support departments based on the percentage of their services provided to other support departments. (2 marks) c) Use the above ranking to allocate the support departments' costs to the operating departments based on the step-down method. Total (5 marks) d) How could you have ranked the support departments differently