SECTION B (50 MARKS) QUESTION 1 (25 Marks) Chain Store Sdn. Bhd. (Chain Store) produces and sell two different style of women shoes, Wedges and Jelyshoe. Wedges are manufactured in Department A and Jellyshoe are manufactured in Department B. Producing these two products. Chain Store has three support departments Material Handling, Power, and Personnel Chain Store has prepared department overhead budgets before allocation as follows: Support Department RM Personnel 33000 Power 20.000 Matera Handia 4200 Operating Department RU Depanment A 34,700 Department B 48.900 Chain Store has decided that the most appropriate inventory costing method is using individual department overhead rates. Department A allocates overhead costs based on direct labour hour and Department B allocates overhead costs based on machine hour. These overhead rates are developed after support department costs are allocated to operating department. Bases for allocation are to be selected from the following: Number of employees Kolowatt hours Noo purchase order Direct labour hours Machine hours Department Personnel department Power department Moral handling Department A Department 5 10 50 75 500 2,000 3.000 20 60 1,500 2.000 5.000 7.000 Required a) Using the Direct Method, allocate Support Department costs to Operating Department. Calculate the overhead rate for Department A and Department B. (6 marks) b) Using the Sepdown Method, allocate Support Department costs to Operating Department. Calculate the overhead rate for Department A and Department B. Use the allocation base for each support department. Hint: Use the following department distribution sequence: Personnel, Power and Material Handling, (9 marks 2014 . RM7 Based on (b), determine the total cost per un for Wedges and Jellyshoe Wedges Jellyshoe Raw material coats RM 20 RM10 Direct labour COM RM15 Manufacturing overhead ? Direct labour hours 1.5 1 Machine Hours 0.5 1 (6 marks Explain why the Step-down Method provides a better basis for computing predetermined overhead roles than the Direct Method (4 marks) d)