The Real McCoys Company has two service departments (S1 and S2) and two production departments (P1 and P2). Department S1 allocates service costs based on machine hours. S2 allocates service costs based on kilowatt hours. The company does NOT make a distinction between fixed and variable costs when allocating service costs. The budgeted total costs in the service departments for 2019 are $70,000 for S1 and $98,800 for S2. Budgeted machine hours and kilowatt hours for the year are as follows: Machine Hours Kilowatt Hours 6,000 Department S1 Department S2 Department P1 Department P2 8,000 4,000 28,000 10,000 4,000 The budgeted costs in the service departments are as follows: Variable costs Supervisor salary Depreciation Expense Department S1 $35,000 $30,000 $ 5,000 Department S2 $48,000 $40,000 $10,800 Department P2 uses machine hours to compute its predetermined overhead rate for 2019. The budgeted departmental overhead for P2 (before service costs are allocated) is $159,400. 1. Using the reciprocal method as needed, compute the predetermined overhead rate for 2019 in P2. Round to the nearest cent, if needed. 2. If the company decided to discontinue Department S2 and purchase kilowatt hours from an outside power company, the cost would be $5.50 per kilowatt hour. You may assume that if we purchase kilowatt hours from an outside supplier, we would fire the supervisor in Department S2. Prepare an analysis that shows the following: A. The relevant external cost to purchase kilowatt hours. B. The relevant internal cost to keep Department S2. C. Is the company better off or worse off to keep Department S2? By how much