Question TWO. Power Ltd manufactures athletic shoes and athletic clothing for both amateur and professional athletes. The company has two product lines (clothing and shoes), which are produced in separate manufacturing facilities; however, both manufacturing facilities share the same support services for information technology and human resources. The following shows total costs for each manufacturing facility and for each support department: Particulars Variable Fixed costs Total costs costs department (Amount in thousands of dollars) Information Technology (IT) 500 1,500 2,000 Human resources (HR) 100 900 1,000 Clothing 3,000 7,000 10,000 Shoes 2,500 5,500 8,000 Total costs 6,100 14,900 21,000 by 1 The total costs of the support departments (IT and HR) are allowed to the production departments (clothing and shoes) using a single rate based on the following: Information technology: Number of IT labour-hours worked by department Human Resources: Number of employees supported by department Data on the bases, by department, are given as follows: Department Clothing Shoes Information technology Human resources IT hours used 5,000 3,000 Number of employees 120 40 40 0 2,000 You are required to calculate the total costs of the production departments (clothing and shoes) after the support-department costs of information technology and human resources have been allocated using: (a) The direct method (b) The step-down method (allocate information technology department costs first) (c) The step-down method (allocate human resources department costs first), and (d) The reciprocal method