Q 1 The accountant for Kadhim Inc. is preparing the budgets for operating department support service costs. Maintenance costs are allocated based on square feet, and cafeteria costs are allocated based on number of employees. The following data have been collected:

Support Departments Operating Departments

Maintenance Cafeteria Cutting Packaging

Direct costs SAR50,000 SAR45,000 SAR275,000 SAR300,000

Number of employees 15 10 150 250

Square feet 1,500 2,000 3,500 4,000

1. If the direct method is used, calculate maintenance costs allocated to the cutting department?
2. If the direct method is used, calculate the total cost (including allocations) for the

packaging department?3as

3. Assume you are working for the organization and are requested to allocate support

department costs. Describe how you would choose the best method?