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Question no 2 A housekeeping support department budgets its costs at SR 40,000 per month plus SR 12 / hour. For January the following were

Question no 2

A housekeeping support department budgets its costs at SR 40,000 per month plus SR 12 / hour. For January the following were the estimated and actual hours provided by the housekeeping support department to 3 operating department.

Estimated hours spent cleaning

Actual hours spent cleaning

Department A

1600

1500

Department B

1400

1600

Department C

2000

1800

Total

5000

4900

Required:

A- What is the support department's allocation rate if estimated activity is the allocation base?

B What is the support department's allocation rate if actual activity is the allocation base?

C List one advantages and one disadvantage for each types of allocation rate. (3 points)

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