The Gleason Company . a Canadian division of a large international company . has prepared estimated! costs for next year that can be traced to each department as follows :` Building and grounds* $ 41.010 Factory administration 78. 270 Cafeteria - operating loss 4.920 Machining 104. 100 Assembly 146. 700 Total $375, 000 Management would like to know the Estimated total allocated product cost per unit . This cost will be used as a benchmark for future - period operations . The following information is available and can be used as possible allocation bases . The difference between direct labour hours and total labour hours represents hours of supervisory labour or labour hours that are used indirectly for manufacturing . The cost of these* hours in machining and assembly is part of manufacturing overhead ." Department Direct Labour* Number of Square Illetres \\Total Labour* Number of Hours Employees Hours Purchase Orders Factory 2.0.00 3 2.000 1.000 administration Cafeteria 1. 0.00 2 100 1. 000 1.000 Machining* 3.0.00 4 350 8. 000 2.000 Assembly* 6.0.00 5 500 10.000 1.0.00 Total 12. 000 14 1.000 21.000 8.000 REQUIRED 1 . Allocate the building and grounds costs to all other departments using square metres as the allocation base . Add the allocated costs to direct costs to arrive at the total costs assigned to each department . Explain whether each remaining department is a support department or an operating department . Compute allocated costs of support department ('s ) for each operating department you decided in part 2 ) . Given the allocation bases of number of employee . allocate support department costs to Each operating department using the step - down method . 4 . Assume that factory administration costs are allocated based on total labour hours and that the total allocated cost is used to charge other departments for administrative services . List one advantage and one disadvantage of this charge system .* { . Suppose you are the manager of the machining department at Gleason . You can outsource some of your department's work . Outsourcing would reduce direct labour hours and , therefore , reduce the* amount of administration costs allocated to your department using direct labour hours as the allocation based . State two factors You should consider in deciding whether to outsource*