Question 1 SuperDry manufactures and sells T-shirts for all kinds of events. The company has two manufacturing operations - shirt-making and printing. When the company receives an order, the shirt-making department obtains the materials requested and has the fabric cut and sewn to sizes. The ready T- shirts are then sent to the printing department where the customer labels or designs are prepared and printed onto the surface with hot press machines. SuperDry has three support departments - Building Maintenance, Human Resources and Designs & Patterns. For the 15 quarter of 201X, the direct/direct overhead costs incurred by each department are as follows (direct costs for $1 - 53; direct overhead costs for P1, P2 and R]: Shirt-making (P1) $260,000 Building Maintenance (51) $65,000 Printing (P2] $170,000 Human Resources (52) $40,000 Sales (R) $ 84,000 Designs & Patterns (53) 538,000 The cost drivers identified for costs incurred by $1, $2 and 53 are number of square footage, number of employees and number of designs respectively. The following table summarises the usage of cost drivers by each department: 51 52 53 P1 P2 R Number of Designs 16 30 8 Number of Employees 4 20 12 12 Square Feet 5,000 10000 10,000 15,000 25,000 5,000 Required: (i) SuperDry allocate support department costs using the step-down method. Recommend the order by which SuperDry should do so. Justify your recommendation. (ii) Compute the total amount of overhead costs for P1, P2 and R using the step-down method and based on the order recommended in part (i). (iii) Assume P1 requires 10,000 direct labour hours (DLH) and 2,000 machine hours (MH) for shirt- making operations, and P2 requires 1,000 DLH and 6,000 MH for printing operations. Compute the departmental factory overhead rates for P1 and P2 using the appropriate cost drivers. (iv) Assume the same information as in (ii) above, compute the plantwide overhead rates based on DLH and MH respectively