Please show calculations and do in excel. if you wont do as such please leave the question for someone else.

Question #1

A Business has two support departments (I.T. Service and Admin) and two production departments (Fabrication and Assembly). I.T costs are allocated based on I.T. support hours. Admin costs relate to number of employees. Their $10 million operating cost budget is shown in the table below.

REQUIRED:

1. Allocate support costs using Direct and Reciprocal methods. (use the excel worksheet or the answer booklet if you prefer). (6 + 9 Marks)
2. Provide a discussion about the benefits / pitfalls of using these two methods plus one other method. Which do you recommend? Why? (There is a space on the spreadsheet) (5 marks)

	IT. Service	Admin	Fabrication	Assembly	Total
Total Cost	$520	$600	$6,280	$2,600	$10,000
IT Support Hours	0	1,200	2,100	700	4,000
#Employees	20	20	120	40	200