Sportz, Inc., 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 costs (in thousands) for each manufacturing facility and for each support department. Variable Costs Fixed Costs Total Costs by Department Information technology (IT) $ 1,200 $ 4,000 $ 5,200 Human resources (HR) 800 2,000 2,800 Clothing 5,000 16,000 21,000 Shoes 6,000 9,000 15,000 Total costs $13,000 $31,000 $44,000 The total costs of the support departments (IT and HR) are allocated 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 IT Hours Used Number of Employees Clothing 10,080 440 Shoes 7,920 176 Information technology 184 Human resources 6,000 Required What are 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 first), (c) the step-down method (allocate human resources first), and (d) the reciprocal method? Assume that all of the work of the IT department could be outsourced to an independent company for $97.50 per hour. If Sportz no longer operated its own IT department, 30% of the fixed costs of the IT department could be eliminated. Should Sportz outsource its IT services?