Question 2 (7marks)Eidaudi Inc. is organized into two major sales divisions: Institutional clients and Retailclients.EidaudiInc. also has two service departments: Finance and Administration. TheFinance department's costs are allocated to the other departments based on a log ofthe hours spent on tasks for each user. The Administration department's costs areallocated to usersbased onthe number of employees in each department.The following information is available for themost recentperiod:FinanceAdministrationInstitutionalRetailOverhead costs$450,000$200,000$700,000$1,000,000Research hours50250600800Number of employees12152030Required:a)Allocate the service department costs to the Institutional and Retail divisions usingthe direct method.(2marks)b)Assume that the step method is usedand the Finance department is the first one tobe allocated. Allocate the service department costs to the Institutional and Retaildivisions.(3marks)c)Assume that the reciprocal method is used. Write the reciprocalcostequations. (DoNOTsolve the equations.)(