Case study 2 West Coast Link Ltd manufactures heating/cooling systems for houses and apartments. It has two support departments: Repairs and Engineering. These two departments directly support the two production departments: Moulding and Assembly. The usage of the two support departments' output is as follows: User of Service Provider of Service Provider of Service Repairs (Repair hours) Engineering (Kilowatt hours) Repairs - 192,000 hours Engineering 800 hours - Moulding 800 hours 672,000 hours Assembly 6,400 hours 96,000 hours The budgeted costs in the two support departments are as follows: Repairs: $192,000 Engineering: $1,000,000 REQUIRED: (a) Allocate the budgeted costs of the two support departments (Repairs and Engineering) to the two manufacturing departments (Moulding and Assembly) using: (i) Direct method (ii) Reciprocal method (b) Compare and explain the main differences between the direct method and the reciprocal method. (c) Which method of cost allocation used in a) above, do you prefer? Explain why. (d) Explain why a manager may prefer that budgeted cost allocation rates be used, rather than actual cost allocation rates, to allocate costs to his or her department from another department