Zaza operates on two support departments Administrative Services and Information System - and two operating departments

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Zaza Operates On Two Support Departments Administrative Services And Information System And Two Operating Departments 1 (190.4 KiB) Viewed 11 times

Zaza operates on two support departments Administrative Services and Information System - and two operating departments coffee bar and deli. The accounting system reported the following budgeted and actual amounts for the first 6 months of 2022: BUDGETED USE Personnel (Hours) Computer Time (Hours) 2. ACTUAL USE Personnel (Hours) Computer Time (Hours) COSTS Budgeted Fixed Overhead Actual Variable Overhead Administrative Information Service System 0 252 Administrative Service 0 336 Administrative Service RM 5,000 RM 3,360 84 0 Information System 126 0 Information System Coffee Bar 672 1,134 Coffee Bar 1,008 2,016 Coffee Bar Rm 5,000 RM 100,000 RM 630 RM 30,240 Deli 924 1,134 Deli 1,386 1,008 Deli RM 40,000 RM 35,910 While variable overhead costs are usually assigned based on actual hours used, fixed overhead costs are allocated based on budgeted hours used. Required: 1. Allocate the two support departments' costs to the two operating departments using the following methods: a) Direct method b) Step-down method (allocate Information System first) c) Reciprocal method using linear equations (4 marks) (4 marks) (8 marks) Round the allocated costs to two decimal places, if necessary. Which cost allocation method would you recommend to zaza, Café to adopt? Explain. (4 marks)