Use the step method to allocate the service departments cost to the production

departments and calculate total costs for each production department.

Question $5$

The following information is available for a local organisation:

Costs for service department A are allocated based on square footage, and costs for service

department B are allocated based on total labor hours.

Required:

a$.$ Using the direct method, allocate the service department costs to the production

departments and calculate total costs for each of the production departments.

b$.$ Using the step method, allocate the service department costs to the production

departments and calculate total costs for each of the production departments.Use the step method to allocate the service departments cost to the production departments and calculate total costs for each production department. Question $5$ The following information is available for a local organisation: Costs for service department A are allocated based on square footage, and costs for service department B are allocated based on total labor hours. Required: a$.$ Using the direct method, allocate the service department costs to the production departments and calculate total costs for each of the production departments. b$.$ Using the step method, allocate the service department costs to the production departments and calculate total costs for each of the production departments.