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CanCorp has two operating departments: Eastern Department and Western Department. Each of the operating departments uses the services of the company's two support departments: Engineering and Information Technology. Additionally, the Engineering and Information Technology departments use the services of each other. Data concerning the past year are as follows: Support Departments Engineering Information Technology $300,000 $250,000 Operating Departments Eastern Western Total Department Department $650,000 $920,000 $2,120,000 $60,000 $50,000 $90,000 $200,000 Budgeted OH Costs Before and interdepartmental allocations Support work furnished: By Engineering - Budgeted Engineering Salaries Percentages By Information Technology - Budgeted IT service hours Percentages 30% 25% 1,500 45% 1,050 450 100% 3,000 15% 50% 35% 100% Required 1. What are the total overhead costs of the operating departments (Eastern and Western) after the support-department costs of Engineering and Information Technology have been allocated using: a) the direct method b) the step-down method (allocate Engineering first) c) the step-down method (allocate Information Technology first) 2. Which method would you recommend that CanCorp use to allocate service- department costs? Why