The Potter Company has two products Product 1 is manufactured entirely in Department X. Product 2 is manufactured in Department Y. To produce these two products the Potter Company has two support departments. Material Handling Department and Power Generating Department. An analysis of the work done by Material Handling and Power Generating Department in a typical period follows: Used By Material Handling Power Generating Department X Department Y Supplied by Material Handling Power generating 250 150 100 00 100 400 The work done by Material Handling Department is measured by the direct labor hours of material handling time. The work done by Power Generating Department is measured by the kilowatt hours per hour. The budgeted costs of the support department for the coming year are as follows: Material Handling Power Generation S70,000 S10,000 Variable indirect labor and indirect material costs Supervision Depreciation Total Costs S10,000 s10,000 S20,000 $20,000 s100,000 S40,000 The budgeted costs of the operating departments for the coming year are S1,500,000for Department X and S$800,000 for Department Y. Required: 1. What are the allocation costs of support departments to production department X and Y using the Reciprocal Method. 2. If the company decided to only allocate support costs to the production department, what will be the total costs for both the production department? 3. An outside company has offered to supply all the power needed by the Potter Company and to provide all the services of the present power department. The cost of the service will be $40 per kilowatt hour of power. Should Potter accept? Explain