Q2.

a) What are the differences between single and dual rate allocation? Explain with suitable examples.

b) Provide a numerical example for single rate allocation and dual rate allocation and explain the process of allocating support department costs to the operating department, assuming that:

• The company has two support departments S1 & S2 and two operating departments O1 & O2.
• The company use the direct method to allocate support department costs.

Note: You are required to provide numerical examples assuming the values of your own and they should not be copied from any sources.