QUESTION TWO: COST ALLOCATION Suki Instrument Company manufactures gauges for construction machinery. The company has two production departments: Machining and Assembly. There are three support service departments: Human Resources (HR), Maintenance, and Computer Aided Design (CAD). The budgeted costs in the company's service departments during the year are as follows: HR $250,000, Maintenance $230,000 and CAD $350,000. The usage of these service departments' output for the year ended 31 December 2017 are as follows: User Departments Production Service Allocation base Support Departments Provider Departments HR Maintenance CADMachining Assembly Staff numbers 4 000 5 000 HR 500 500 Machinery value Maintenance (soo0) 3 500 4 000 500 ($000) CAD 4 500 Design requests 1 500 Required: (a) Calculate the total overhead costs from the three service departments allocated to the Machining and Assembly departments using the step down method of allocation. (8 marks) (b) Explain the difference between the step down method and the reciprocal method (4 marks)