QUESTION 2 Suzlon Corp manufactures engines used in electric power generating plants. Suzlon has two support departments (Plant Maintenance and Information Systems) and two operating departments (Machining and Assembly) in its manufacturing facility. Costs are accumulated in each department for planning and control purposes. For stock costing, however, the support department costs of Suzlon must be allocated to the operating departments. The data for allocating support department costs at Suzlon for the year 2017 is provided below: Support departments Operating departments Particulars Plant Information Machining Assembly Total Maintenance Systems Budgeted manufacturing overhead costs $600,000 $116,000 $400,000 $200,000 $1,316,000 before any inter- department cost allocations Support work furnished by Plant Maintenance 1,600 2,400 4,000 8,000 -Budgeted labour hours Support work furnished by Information Systems 200 1,600 200 2,000 - Budgeted computer time REQUIRED: Allocate the costs of the two support departments to the two operating departments using the following methods: (a) Direct method (b) Step-down method (Rank support departments on the percentage of the support department's total support provided to other support departments. The support department with the highest percentage is allocated first. The support department with the lowest percentage is allocated last). (c) Reciprocal allocation method (3+5+7 = 15 Marks)