SN childcare ("SN") is a mid-sized childcare operator in Singapore. It operates in 12 locations across the island. Its headquarters is located in its first centre in Orchard Road. The corporate office consists of three departments: Admin, Marketing and Facilities. The three departments exist purely to support the 12 childcare centres. Currently, the costs of the support departments are allocated equally to each childcare centre regardless of size. The following table shows the annual budget of each support department and usage of their services Provider of service Admin Marketing Facilities Total User of services Admin Marketing Facilities Childcare centres 28% 22% 50% 10% 100% 8590 Annual budgeted dept. costs S890,000 $1,100,000 $890,000 $2,880,000 Required (a) Currently, SN uses a direct approach to allocate support departments costs Calculate the total costs that will be allocated to each of the 12 operating childcare centres (5 marks) (b) The founder of SN is considering allocating support departments' costs using the step down method. Without performing any computations, discuss (with ppropriate sequence of allocations by department. Explain s a result of this justifications) the a whether there would be a difference in the profits of SN group a change in the allocation method. (5 marks) (c) Ignoring your allocation sequence in (b), calculate the support department costs allocated to each childcare centre using the step down method beginning with admin, followed by facilities, and finally marketing (9 marks) ii) Discuss the best method to allocate support department costs for SN (include reasons why other allocation methods may or may not be superior in this instance) (5 marks) SN childcare ("SN") is a mid-sized childcare operator in Singapore. It operates in 12 locations across the island. Its headquarters is located in its first centre in Orchard Road. The corporate office consists of three departments: Admin, Marketing and Facilities. The three departments exist purely to support the 12 childcare centres. Currently, the costs of the support departments are allocated equally to each childcare centre regardless of size. The following table shows the annual budget of each support department and usage of their services Provider of service Admin Marketing Facilities Total User of services Admin Marketing Facilities Childcare centres 28% 22% 50% 10% 100% 8590 Annual budgeted dept. costs S890,000 $1,100,000 $890,000 $2,880,000 Required (a) Currently, SN uses a direct approach to allocate support departments costs Calculate the total costs that will be allocated to each of the 12 operating childcare centres (5 marks) (b) The founder of SN is considering allocating support departments' costs using the step down method. Without performing any computations, discuss (with ppropriate sequence of allocations by department. Explain s a result of this justifications) the a whether there would be a difference in the profits of SN group a change in the allocation method. (5 marks) (c) Ignoring your allocation sequence in (b), calculate the support department costs allocated to each childcare centre using the step down method beginning with admin, followed by facilities, and finally marketing (9 marks) ii) Discuss the best method to allocate support department costs for SN (include reasons why other allocation methods may or may not be superior in this instance)