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ACT 301

Q2. RCR has two support departments, X1 and X2, and two operating departments, Z1 and Z2. RCR has decided to use the direct method and allocate variable X1 dept. costs based on the number of transactions and fixed X1 dept. costs based on the number of employees. X2 dept. variable costs will be allocated based on the number of service requests and fixed costs will be allocated based on the number of computers. The following information is provided: (Week 9, Chapter 8) (4 Marks)

	Support Departments		Operating Departments
	X1	X2	Z1	Z2
Total Department variable costs	12,500	15,000	95,000	52,500
Total department fixed costs	14,500	27,500	105,000	45,000
Number of transactions	38	45	175	112
Number of employees	14	18	38	30
Number of service requests	30	18	38	25
Number of computers	15	20	25	30

You are required to allocate the variable and fixed costs.