ASSIGNMENT MATE Total Costs by Department ia thousands) Information technology IT) Human resources (HR) Clothing Shoes Total costs Variable Costs s 500 s 100 $3,000 Fixed Costs 1,500 $ 900 7,000 5,500 $ 2.000 S 1,000 $10,000 $ 8.000 The total costs of the support departments (IT and HRI) are allocated to the production departments (cloth ing and shoes) using a single rate based on the following Information technology: Human resources: Number of IT labor hours worked by department Number of employees supportad by departmant Data on the bases, by department, are given as follows Department Clothing Shoes Information technology Human resources IT Hours Used 5,000 3,000 Number of Employees 120 40 40 2,000 1. What are the total costs of the production departments (clothing and shoes) after the support depart Re ment costs of information technology and human resources have been aljocated using (a) the direct method, fb the step-down method (allocate information technology first), (c) the step-down method (allocate human resources first), and (d) the reciprocal method? 2. Assume that all of the work of the IT department could be outsourced to an independent company for $97.50 per hour. If Spirit Training no longer operated its own IT department, 30% of the fixed costs of the IT department could be eliminated. Should Spirit outsource its IT services? Collaborative Learning Problem 15-35 Revenue allocation, bundled products. Exclusive Resorts (ER) operates a five-star hotel with