Question: Explain with suitable examples why the support department costs are allocated to operating department? Briefly explain any one method of such allocation with numerical examples.

Explain with suitable examples why the support department costs are allocated to operating department? Briefly explain any one method of such allocation with numerical examples.

Suitable example of supporting department are IT and Accounting, their costs 10K & 20K respectively.

Supporting two products, paper and glass, their total costs are 30K & 40K respectively.

Please don't paste photos and explain the formula of allocation using the direct method (easiest) in table form.

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