Support department cost allocation (20 marks) Hamilton Manufacturing has two support departments and two operating departments. Budgeted costs and normal activity levels are as follows: Support Departments Accounting Facilities $200.000 $500.000 8,000 200 Overhead costs No. of transactions processed Square metres occupied Machine hours Direct labour hours Driver used to allocate costs Operating Departments Machining 1 Assembly $440,000 $340,000 52.000 20,000 2000 1800 20,000 1,000 12,000 Machine hours Direct labour hours 1,500 No. of transactions Square metres occupied Hamilton Manufacturing has two support departments and two operating departments. Budgeted costs and normal activity levels are as follows: Support Departments Operating Departments Accounting Facilities Machining Assembly Overhead costs No. of transactions processed Square metres occupied Machine hours Direct labour hours Driver used to allocate costs No. of transactions processed Square metres occupied Machine hours Direct labour hours Required: (a) Calculate the allocation ratios for the reciprocal method of allocating support department costs (3 marks) (b) What are the allocation equations for the reciprocal method? (2 marks) (c) Solve the simultaneous equations to find the total cost of each support department to allocate. (You may type in your working if you find it too difficult to do the working with the spreadsheet formulas.) (d) (5 marks) Using the allocation ratios in part (a), allocate the service department costs to the operating departments. (6 marks) (e) Calculate the predetermined overhead rates for the operating departments