Radz Company has two support departments (Administration and Janitorial) and three producing departments (Fabricating, Assembly, and Finishing). Costs and activities are as follows:

	Administration	Janitorial	Fabricating	Assembly	Finishing
direct cost	$60000	$55000	$40000	$50000	$25000
number of employees		10	30	40	20
square feet	2000		1000	28000	15000
direct labour hours			5000	6000	1000
machine hours			1000	2000	5000

Administrative services are allocated based on the number of employees; janitorial services are allocated based on square footage. Overhead rates for the Fabricating and Assembly producing departments are based on direct labor hours while for Finishing department rate is based on machine hours. A recent job QW8 had the following requirements:

	Fabricating	Assembly	Finishing
direct labor hours	10	8	2
machine hours	4	3	8

Required1.

Using the direct method:a. Allocate the support department costs to production departments.

b. Calculate predetermined plantwide overhead rate of the production departments basedon direct labour hours

c. Estimate the overhead cost of job QW8

Using the reciprocal services method:

a. Allocate the support department costs to production departments.

b. Calculate predetermined departmental overhead rate of the production departments.

c. Estimate the overhead cost of job QW8

Should Radz company use a plantwide rate or departmental rates to assign overhead costs toproducts? Which method of support department cost allocation results in most accurate resultsof product costs? Explain your answer