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Support activity cost allocation Jake's Gems mines and produces diamonds, rubies, and other gems. The gems are produced by way of the Mining and Cutting activiti These production activities are supported by the Maintenance and Security activities. Security costs are allocated to the production activities based on asset value. Maintenance costs are normally allocated based on machine hours. However, Maintenance costs typical correlate more with the number of service calls. Information regarding the activities is provided in the following table: 1. Is the process of allocating maintenance costs based on machine hours correct? Identify the measure than can possibly be used to allocate the maintenance costs. Measures that can possibly be used to allocate the maintenance costs. a. Number of service calls b. Asset value c. Department cost d. None of the above 2. Based on your response to part (1), determine the total costs allocated from each support activity to the other activities using the reciprocal services method and the most appropriate cost driver for Maintenance. 2. Based on your response to part (1), determine the total costs allocated from each support activity to the other activities using reciprocal services method and the most appropriate cost driver for Maintenance. 3. Assume Jake's Gems is considering cutting costs by switching to a simpler support activity cost allocation method. Determine t costs allocated from each support activity to the other activities. Is it viable for the company to choose the direct method of cost allocation? Which of the following supports your answer? a. The direct cost allocation method is too simple and it is not accurate. b. The difference between the direct cost allocation method and the reciprocal method is minimal and the direct method is easier. c. The reciprocal method of cost allocation is more accurate and easier than the direct method. d. None of the above